Mortgage Shock Awaits UK Homebuyers After Pandemic Tax Break (1)

The UK’s tax holiday on property purchases during the pandemic seemed like a dream chance to buy a home. For many who did, it may soon look more like a nightmare.

A huge cohort of purchasers opted for cheap two-year mortgages and are due to refinance by September 2023. But borrowing costs have risen to a multi-year high, meaning their new monthly housing payments may be 25% higher, or even more.

The relief on the stamp-duty levy ran from July 2020 to September 2021. About 42% of borrowers in that period, which includes those remortgaging, fixed for only 24 months, ...