Average interest payments on fixed-term mortgages are set to soar by 55% this year to £500 a month, which would exacerbate the cost-of-living crisis in United Kingdom.

And the average cost for fixed-term holders is set to more than double from £322 at the end of last year to £701 a month by 2027, analysis conducted by Interactive Investor for The Mail on Sunday reveals.

This increase follows hikes in central bank interest rates to control escalating inflation, which has been driven higher by soaring energy and food costs.

UK mortgage holders are individuals who have taken out a loan to purchase a property, usually a home. They make regular repayments to the lender, typically over a period of 25-30 years, until the loan is fully paid off.

The amount of the mortgage and the interest rate will vary depending on factors such as the value of the property, the borrower’s credit score, and the lender’s criteria. In the UK, there are a variety of different mortgage products available, including fixed-rate mortgages, variable-rate mortgages, and interest-only mortgages.

Mortgage holders in the UK are typically subject to regulations set by the Financial Conduct Authority (FCA) and must adhere to certain lending criteria. These regulations are designed to protect borrowers and ensure that they are not subject to unaffordable lending practices.

Some factors that contribute to the cost-of-living crisis in the UK include:

• Inflation: Inflation is the rate at which the prices of goods and services increase over time. If inflation is higher than wage growth, people will experience a decrease in their purchasing power.
• Housing costs: The cost of housing has been rising faster than incomes in many parts of the UK, making it difficult for people to afford rent or mortgages.
• Energy costs: The cost of energy has also been rising, which can impact people’s ability to heat their homes or pay for other necessities.
• Slow wage growth: In recent years, wage growth has been slow in comparison to inflation, which can exacerbate the cost-of-living crisis.

The UK government has taken some steps to address the cost-of-living crisis, such as increasing the minimum wage and introducing measures to reduce energy costs. However, there is still significant debate about the most effective ways to address this issue and ensure that people are able to afford the basic necessities of life.