Britain's mortgage market is facing renewed pressure as a global bond selloff and higher energy prices linked to the Iran war push borrowing costs higher. Richard Merrett, managing director at mortgage firm Alexander Hall, expects his monthly payment to rise from £550 to £1,650 when his five-year fixed-rate deal expires in early 2027. The UK's 30-year government bond yield topped 6% on Thursday for the first time since 1998 and stood just below that level on Friday, raising banks' funding costs. The Bank of England estimated that more than 5 million households could see mortgage repayments increase by the end of 2028, including almost 750,000 borrowers whose fixed-rate loans expire this year. Mortgage approvals have fallen to their lowest level since the end of 2023, while similar rate pressures are emerging in the United States, euro area and Australia. Capital Economics still expects UK house prices to rise 2.5% in 2027, although higher government borrowing could limit a housing recovery.