Five million households face paying an extra £240 a month on their mortgage bills by the end of 2026 as the last of cheap fixed-rate loans come to an end, the Bank of England has warned. The anticipated spike comes after 5.5 million mortgagors have already moved onto more expensive deals since the Bank started raising rates at the end of 2021. The Bank’s base rate now stands at 5.25pc, up from 0.1pc two years ago. Its latest analysis shows that households are on track to spend around 9pc of their incomes on servicing mortgage debt by 2026, up from 6pc before the Bank started its cycle of rate rises. However, officials on the Financial Policy Committee (FPC), led by Governor Andrew Bailey, are less worried than they were earlier in the year because mortgage rates have started to fall and pay is rising faster than expected. It means that overall pressure on household finances will not be as bad as feared when mortgage rates peaked in the summer. Since the FPC’s last meeting in October, “quoted fixed interest rates had moderated slightly and real income had increased by more than expected”, policymakers said. The FPC added: “These factors were...