The Rise of Mortgage Rates in the UK

In the UK, mortgage rates began rising at the end of 2021. They went from 2% to 4% in less than a year and now a two-year fixed rate mortgage is above 6%. The interest rate a new borrower would pay on their mortgage has pretty much tripled in less than two years. Back in the era of double-digit interest rates, after coming up with a down payment, people typically borrowed two times their annual income. Today British home buyers borrowed 3.5 to 4.5 times their annual Income which was affordable because rates were low. House prices went up as interest rates fell as lower interest rates meant that an average earner could buy more house with the same monthly