UK homeowners take a hit as global bond selloff deepens
TLT•A global bond selloff has pushed up mortgage rates, adding pressure on UK borrowers as energy costs stoke inflation. The UK 30-year government bond yield topped 6%, while the Bank of England estimated almost 750,000 borrowers with expiring fixed-rate mortgages face an average £170 monthly increase.
1. Mortgage costs climb
Richard Merrett’s five-year mortgage rate of 1.14% is due to expire in early 2027, and he expects his monthly payments to rise from £550 to £1,650. He said the increase would require belt-tightening.
2. Borrowers face pressure
Britain’s 30-year government bond yield topped 6% on Thursday for the first time since 1998. The Bank of England estimated that more than 5 million households could see mortgage repayments increase by the end of 2028; almost 750,000 borrowers whose fixed-rate deals are due to expire this year face an average monthly increase of £170.
3. Rates weigh on housing
The UK’s two-year Sonia swap rate rose 27 basis points in a month to 4.68%, and lenders have withdrawn some mortgage deals. Mortgage approvals fell to their lowest level since the end of 2023, while UK house prices recorded their weakest growth since December 2025, Nationwide Building Society said.
