Iran War Impact: 1 Million More Homeowners Face Higher Mortgage Bills Than Expected
Quick Look
- The Bank of England forecasts that over 5 million homeowners will see increased mortgage bills by end-2028, a rise of 1 million from previous estimates, due to the impact of the Iran war.
- While the hit won't be as severe as recent years, typical monthly bills could increase by £45.
AI-generated summary
Why It Matters
The Bank of England's Financial Stability Report indicates that the impact of the Iran war will lead to higher mortgage bills for more homeowners than previously anticipated.
The impact of the Iran war means a million more homeowners face higher mortgage bills than the Bank of England had previously expected.
Just over five million homeowners should expect their monthly mortgage repayments increase by the end of 2028, according to Bank forecasts.
That compared to four million projected by the Bank in December.
However, the Bank's Financial Stability Report said the hit would not be as hard as seen in recent years.
A typical owner-occupier rolling off a fixed rate in the next two years is likely to face an increase of £45 on their monthly mortgage bill, the Bank said. That compares to a typical rise of £120 for those getting a new deal between the end of 2022 and end of 2024.
More than eight in 10 mortgage customers have fixed-rate deals.
The interest rate on this kind of mortgage does not change until the deal expires, usually after two or five years, and a new one is chosen to replace it.
What to Watch
AI outlook — possibilities, not facts
Over 5 million homeowners to face increased mortgage bills by end-2028.
Likely · Medium term
Open Questions
- Will interest rates rise further?
- How will this affect the housing market?
