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Exploring the impact of interest rates rise on variable rate mortgage holders

Populus research finds one in 20 variable rate mortgage holders potentially at financial risk from interest rate hikes

November saw the interest rate rise for the first time in more than 10 years, going from 0.25% to 0.5%. With rumours of an increase twice more over the next three years, what is the potential impact on home owners?

The first interest rate rise in more than a decade arrived last month. and it has potential implications for home owners, particularly those on variable rate mortgages. Populus research on behalf of Which? published last month, uncovers the extent of the impact on home owners when it comes to rising interest rates.

Home-owners on variable mortgage rates

Populus research on behalf of Which? conducted last month shows that around a third (31%) of those on variable rate mortgages say there would be an impact on their living if interest rates reach 0.5%. One in 20 said such a rise would leave them struggling financially.

The research shows that that 42% of all those with existing mortgages have been homeowners for 10 years or less. This means that just under half of mortgage holders have never experienced such a rise, raising important questions around levels of awareness and preparation.

The long-term effects of the interest rates rise won’t be known for a while. With reports that house prices grew more slowly last month – with demand for fixed rate mortgages rumoured to grow, it certainly has the potential to affect the housing market for some time.

Populus’s Business & Consumer Insight team unlocks the Critical Knowledge that brands need to better understand the world around us. We add value to our findings by applying expert analysis to uncover clear, actionable insight. Find out more by calling 020 77253 9900 or emailing info@populus.co.uk

Methodology:

Populus, on behalf of Which? surveyed 2101 adults online from across the UK between 18 and 19 October 2017. The data has been taken from nationally representative omnibus surveys and has been weighted to the profile of the population.

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