Current UK Remortgage Rates Skyrocket Amid Economic Turbulence

by | Thursday 16th May 2024 | Mortgage News

Average UK remortgage rates skyrocket

Average UK remortgage rates skyrocket

The latest data from Mojo Mortgages reveals a startling surge in remortgaging rates, with the average mortgage rate in April 2024 soaring to 5.33%. This figure is almost triple the rate seen in April 2022, which stood at a modest 1.78%. The steep increase in mortgage rates can be directly linked to the Bank of England’s (BoE) aggressive base rate hikes, which have risen from 0.1% in late 2021 to a substantial 5.25% in an effort to curb persistent inflation. Let’s take a look at what other data Mojo have found about average UK remortgage rates.

Rising UK Remortgage Rates Hit Homeowners Hard

According to the data released by Mojo, If you are homeowners with a £250,000 mortgage over 20 years, the financial impact of rising rates is profound. In April 2022, the monthly payment was £1,238. By April 2024, this had jumped to £1,695—an increase of £457 per month. This translates to an additional £5,484 annually and a staggering £10,968 over a typical two-year fixed-term rate, according to Mojo Mortgages’ analysis.

Increased Repossessions Highlight Growing Financial Strain

The rise in remortgage rates is not just a number on paper; it has real-world consequences. UK Finance’s recent figures highlight a worrying trend: the number of repossessed properties in the UK has increased by 36% in the first quarter of 2024. From January to March 2024, 870 properties were repossessed, a significant uptick that underscores the financial pressure on homeowners.

Mortgage Arrears On The Rise

Additionally, the data reveals that 96,580 homeowner mortgages were in arrears of 2.5% or more of the outstanding balance at the end of the first quarter, marking a 3% increase from the previous quarter. Of particular concern is the group of 32,470 mortgages in severe arrears, where the balance exceeds 10%. This segment has seen a 6% increase compared to the previous quarter, reflecting the escalating financial distress among UK homeowners.

Cost-of-Living Crisis Compounds The Problem

The cost-of-living crisis and escalating household bills have been identified as major contributors to the current mortgage crisis. As everyday expenses continue to climb, many homeowners are finding it increasingly difficult to keep up with their mortgage payments, leading to higher arrears and repossessions.

Remortgage Rates UK: Looking Ahead

The rapid increase in mortgage rates and the corresponding financial strain on homeowners highlight the broader economic challenges facing the UK. With the BoE continuing to prioritise inflation control, further rate hikes could be on the horizon, potentially exacerbating the financial woes of many households.

Speak To A Mortgage Expert

Homeowners are advised to seek financial advice and explore all available options to manage their mortgage payments and avoid falling into arrears. That is where we come in. At Oportfolio our entire job is to help you to get the most competitive and most beneficial mortgage rates, terms, and products for your circumstances. As the economic landscape continues to evolve, staying informed and proactive is crucial for navigating these turbulent times. Call or email our team of mortgage experts today if you have a mortgage that you need to discuss or want to chat through current remortgage rates in the UK.

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If you have any questions about UK mortgage news or or anything you’ve read then please get in touch. We’d love to hear from you.

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