Factoring in interest rate rise

Calzor_Suzay

Obviously mortgage rates are going to go up, how quick and how much who knows :money: but when looking at affordability of a mortgage how much would you factor in a rate rise to the point you can't afford it anymore?

Thrugelmir

Rates aren't even normal yet.

Normal will be in the 6% - 8% range.

Calzor_Suzay

That's what I mean mortgages are about 3.4-4% odd so do you factor in being able to pay 8% or is that 6-8% base then the lenders cut on top?

Also what about this article?

Thrugelmir

I would expect base to eventually settle in the 3.5% to 5.5% range. Banks will then lend in a band of 2% - 2.75% above this on SVR's.

littlemi_2

Thanks, I was just about to post a thread asking this very question.

I've been working with the idea that rates will be 8%. Anything below that we can overpay.