100,000 FACING MORTAGE BLOW IN LONDON

>> AVERAGE MONTHLY BILLS COULD SOAR BY £539 AS FIXED-TERM DEALS END AND RATES TO RISE

LONDON homeowners face a £700 million mortgage bombshell this year as thousands of borrowers on cheap fixed deals are forced to refinance them at far higher rates.

More than 100,000 fixed-rate loans secured on homes in the capital are due to expire between now and the end of the year, mostly five and two-year deals taken out in 2018 and 2021 respectively when mortgage rates were at all-time lows of around the two per cent mark. However, a succession of Bank of England rate rises since December 2021 means that fixed mortgage rates now average 5.28 per cent for two-year deals and five per cent for five-year deals, according to the latest figures from Moneyfacts.

An Evening Standard analysis of data from industry body UK Finance and the House of Commons library shows that this will force huge numbers of homeowners to shoulder big increases in their housing costs that could have a major impact on the London economy. With the average London mortgage standing at around £350,000 that would mean the monthly bill on a repayment loan with 20 years left to run going up by £539 a month, from £1,770 to £2,309, or nearly £6,500 a year. Across London as a whole that would add around £675 million to the cost of servicing mortgages this year alone with more likely to follow in 2024.

The far smaller number of tracker and variable rate mortgages are also set to get more expensive as the Bank of England continues to raise borrowing costs, bringing the total extra burden to around £700 million.