The Bank of England has warned that household finances in the UK remain stretched, and the full impact of higher interest rates and mortgage pricing is yet to be fully felt.

Around 45% of fixed-rate mortgage deals agreed before the end of December 2021 are yet to renew, and higher rates are expected to affect around 5 million households by 2026.

For the typical owner-occupier mortgagor rolling off a fixed rate between Q2 2023 and the end of 2026, monthly mortgage repayments are projected to increase by around £240, or around 39%. The Bank noted that although interest rate rises may have peaked, the cost of borrowing is likely to remain higher for longer.