Moody's are out with a note on the UK mortgage market
- UK mortgage borrowers strength will enable them to withstand moderate interest rate rises
- Borrowers that are up to date on their payments will be able to adjust discretionary spending if incremental rate rises are spread over next three years
- Rates would need to rise to stave of inflationary pressure
- Arrears in residential mortgage deals are not likely to increase much
- Analysis shows that about 1% additional non-conforming borrowers would be unable to cover mortgage payments and living costs on a cumulative 1% rise in rates
- Only an increase of 4.0% would face payment problems if rates rose to 3.0% in a harsher scenario
This is one of the main reasons why central banks are desperate to see wages grow as the stronger wages are, the more able borrowers will be able to handle the coming rate rises. People have had a good few years to prepare for hikes but you can bet there's still going to be a lot of moaning going on when they do
