Despite an escalating price war between lenders cutting the cost of remortgaging in recent days, economists at the US investment bank Goldman Sachs said many UK households would still experience a dramatic leap in repayments compared with the deals they were leaving behind.
In what has been described as a Tory mortgage timebomb by Rishi Sunak's critics, up to 1.5m households are expected to reach the end of cheaper deals in 2024 - with an increase in annual housing costs of about £1,800 for the typical family, according to the Resolution Foundation thinktank.
As fixed-rate deals expire and households absorb the biggest hit to their finances in the postwar age, with inflation and tax rises taking their toll on spending power, borrowers are turning to a range of measures to cope with the increased costs, from renting out rooms in their homes to drawing down pensions early and even postponing having children.
Pressure should begin to ease in the spring, with the Bank of England widely expected to cut interest rates to below 4% by the end of the year from the current level of 5.25%.
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