Rate rise worry for homeowners
Sarah Pennells, Consumer Finance Specialist, commented:
"Just when it looked like the worst of the cost of living crisis might be over, along comes another hike in interest rates.
"Around a million households are due to come off cheap fixed rate mortgage deals between now and the end of the year, and many face a massive shock to their personal finances when it comes to getting a new home loan.
"The majority will have borrowed at rates below 2%, but now face rates of more than 4% when they look to secure a new deal.
"It’s not just owner-occupiers who are suffering. The impact of rising interest rates has been particularly acute in the private rental sector where tenants have seen a huge spike in rents.
"Many landlords have exited the sector recently and those who remain may feel they have little choice but to pass their increased finance costs onto tenants.
"The result is that private renters are now paying more of their disposable income on housing costs than mortgage holders.
"Rates on savings accounts have been increasing in recent months, but don’t generally rise as quickly as mortgage rates. Anyone with money in a savings account, should check the interest rate they are receiving and see if it makes sense to move their money to get a better rate."
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About Royal London
Royal London is the UK's largest customer-owned life, pensions, and investment company, and one of the top 30 mutuals globally*. With over 160 years of heritage and no external shareholders, we're able to take a long-term view, focusing on supporting better outcomes for our customers.
Today, Royal London looks after 8.4 million life and pension policies, with £212 billion of assets under management and over 5,000 colleagues**. In 2026, we shared £199 million of our profits with approximately 2.4 million eligible customers.
We invest in partnerships that reflect our values, including being the only Founding Partner of the first British & Irish Lions Women's Team, supporting women's and girls' rugby across grassroots and elite levels to help develop the next generation of players and coaches. All driven by our commitment to doing what's right for our customers.
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*Based on total 2024 premium income. International Cooperative and Mutual Insurance Federation Global data, 2026.
**Figures quoted are as at 30 June 2026.
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