Half of UK mortgage holders are likely to see their repayments rise over the next three years, the Bank of England has said.
It estimates that around 4.4 million mortgages will see their payments rise by 2027, including an increase of £500 a month for around 420,000 households.
However, around a quarter of borrowers are expected to see their repayments fall, and the Bank said households were better equipped to meet mortgage repayments than expected earlier this year.
The Bank also warned that global risks to the economy were increasing, saying wars, trade tensions, cyberattacks and geopolitical tensions posed “significant” risks to financial stability overall.
In its latest financial stability report, the Bank said household finances had remained resilient in general.
“While many UK households, including renters, still face pressures from rising living costs and rising interest rates, the proportion of households who are behind on their mortgage payments their mortgage is low by historical standards,” the report said.
“And the share of households spending a high share of their income on mortgage repayments is expected to remain low.”
Regarding the global situation, the Bank said that “uncertainty and risks surrounding the global economic outlook have increased.”
The bank did not specifically mention U.S. President-elect Donald Trump's plan to impose tariffs on goods from Canada, Mexico and China, but highlighted the “potential for 'increased global fragmentation' of trade.
He said this potential for trade fragmentation “poses risks to the UK’s financial stability”.
