Mortgage Rates Rise To 6 Pecent For Remortgages And New Buyers But Stress Tests Make It Harder

5th October 2022

As the banks and building societies get to grips with the new reality of rising interest rates the cost for property buyers whether first time or re-mortgages is going up.

Making things even harder is the stress testing that is done to prove anyone can afford a mortgage and make the payments each month for the life of the mortgage.

First to apply harsh stress tests are TSB now asking people to prove they can afford to pay if the rates rise to 7 or even 8 percent.

Affordability checks have always been done but with the threat that the Bank of England may be forced to raise interest rates even more in coming months and into 2023 they take on even more importance and become a hard barrier to climb for people looking to buy property.

Metro Bank hiked its two and five year stress rates to 7.5 per cent last week whilst NatWest increased its two year fixed stress tests from 5.5 per cent to 7.83 per cent.

There is now rush to try and get new rate locked in before existing mortgage deals end. Even with new higher rates some people want the peace of mind of knowing they have a few years knowing what they will pay rather than leave it to rising rates.