Hundreds of thousands on five-year deals to emerge from crisis unscathed

More than one in 10 borrowers will escape the mortgage crisis unscathed, analysis suggests.

Some 1.6m out of more than 8m mortgages in Britain are locked into fiveyear fixed deals taken out around the pandemic property boom years when interest rates fell to historic lows. They are not due to refinance until 2025 or after, when analysts now expect interest rates will have reverted back to far more manageable levels.

It means hundreds of thousands of people are likely to escape the era of surging interest.

Fears that high interest rates would lead to a crash in the housing market have also so far failed to materialise.

Aaron Strutt, of broker Trinity Financial, said: “Things are clearly a lot better.” He added that some lenders were already offering below 4pc interest fixed deals. “If your mortgage is coming up for renewal over the next six months, it makes sense to book a rate and make sure you’re covered. The general expectation is that rates will get cheaper, but there’s no guarantee.”

Homeowners will be able to remortgage and take advantage of 3pc rates by 2025, according to Capital Economics.

Analysis of figures from the banking trade body UK Finance show that on top of 1.6m households protected by five-year fixes, there are more than 75,000 borrowers signed up to fixed interest periods of over five years.

In addition to this, more than half of homeowners do not have a mortgage. This provides another layer of protection for the housing market from distressed sales caused by high borrowing costs. David Hollingworth, associate director at L& C Mortgages, said: “The rates have shot up because there is something of a lag period. The big benefit of that is as rates have risen rapidly, many [ borrowers] have been protected from those increases.

“There’s a lot who will be coming towards the end of their fixed rate. The most unfortunate ones would have already come to that point and had to refinance. Thankfully, it looks like inflation is coming under control.” The Bank of England is expected to ease rates to around 3pc by the middle of the decade allowing lower interest deals to come back on to the market. Major lenders have already begun cutting mortgages amid anticipation central interest rates will fall faster than previously thought this year. Noah Eastwood

Borrowers who can wait until 2025+ to refinance when interest rates may be lower