A million more UK homeowners face higher monthly bills than previously predicted as conflict in Iran rattles global markets. The Bank of England now expects just over five million people to see their mortgage repayments climb by the end of 2028.
This figure represents a sharp jump from the four million homeowners projected in December, according to Bank forecasts. The shift highlights how geopolitical instability can leak directly into the pockets of suburban borrowers.
The Bank’s Financial Stability Report suggests the coming hit may be softer than the shocks of recent years. A typical owner-occupier rolling off a fixed rate in the next two years will likely see a monthly increase of £45, the Bank said.
That is a modest rise compared to the typical £120 jump seen by those securing new deals between the end of 2022 and the end of 2024. However, a specific group of borrowers faces a much steeper cliff.
Around 750,000 homeowners currently paying less than 3% interest will roll off those deals this year. The Bank reported these individuals would face an average monthly increase of £170.
For Saima Siddiqui, a 33-year-old refinancing a one-bedroom flat in Surrey, the reality is even harsher. She expects an extra £200 monthly cost, which she said means she will have to budget a lot more carefully.
The data reveals a fragmented recovery where those on ancient, ultra-low rates suffer most. While the average rise is tempering, the “low-rate legacy” creates a hidden class of vulnerable borrowers.
The market now looks toward the end of 2028 as the final horizon for these shifts. Whether rates stabilise or climb further depends on the volatility of the coming months.
