New data shows that as many as 500,000 borrowers will swerve the spike in mortgage rates that has hit millions of other households.
Those lucky homeowners will not have to find a penny more in monthly repayments until 2027, according to the Bank of England.
They have saved thousands of pounds compared with those whose repayments have gone up with interest rates in recent years. And when their fixed-rate deals end, they should be able to switch to fairly favourable new deals.
A typical increase in 2027 could be £178 a month, half the level of that faced by a borrower remortgaging in 2023, according to analysis by financial service platform Hargreaves Lansdown.
Protected: Lucky homeowners will not have to find a penny more in monthly repayments until 2027, according to the Bank of England
Such was the effect on households of the rise in the cost of mortgage deals that followed the Liz Truss mini-Budget in September 2022 that Chancellor Rachel Reeves is planning legislation intended to prevent a repeat of similar shock announcements on spending and tax.
In September 2022, the average two-year fix was 3.66 per cent. By October it had leapt to 5.24 per cent and to 5.9 per cent by the beginning of November.
The Bank of England figures showed that while many borrowers have seen their monthly payments rise, there are still three million on rates of less than 3 per cent.
About 2.5 million of these are on deals due to expire by the end of 2026. That leaves half a million who do not have to pay more until 2027.
Sarah Coles, head of personal finance at Hargreaves Lansdown, said if average mortgage rates fall alongside Bank of England rate projections, a typical two-year fix would fall to 4.67 per cent.
‘This is still well above the levels we were used to before rates started their inexorable rise, but well down from their peak, so half a million remortgagers will escape the worst of the hikes,’ Coles said.
A borrower who fixed for five years at a typical 2.66 per cent in January 2022 on a 25-year £200,000 mortgage would pay £54,780 over the five years, she calculated.
If someone was paying the same rate in 2022 but the deal ran out at the start of 2023 – leaving them on a new deal at 5.79 per cent – it would see them pay £70,908 over the five years, as their monthly repayments would have gone up by £336.
Coles said the average household typically has £296 left at the end of each month, adding: ‘Finding £178 more for the mortgage is clearly more manageable than £336.’
And those on the ten-year deals that were available at less than 2 per cent in late 2021 should ‘pat themselves on the back’ said David Hollingworth at L&C Mortgages.
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