Why are mortgage interest rates rising?

Posted on: 31st October 2022 | Filled under: Property Market News
Written by:

Inflation causes prices of all commodities to gradually increase.

As that happens, the purchasing power of the average person dwindles, especially if income doesn’t rise at the same rate – which often it doesn’t.

Mortgage brokers, in response, have to increase interest rates to combat the hike caused by inflation. If inflation rates are high, mortgages will increase. If inflation is slow, mortgage rates might remain steady or simply rise at a much slower pace. Inflation is inevitable so it will always play a factor in causing mortgage rates to slowly go up over time. 

Mortgage rates have been rising for months as central banks raise interest rates to try to get to grips with soaring inflation, they have increased sharply since September due to market fallout from the government’s mini-budget. 

The last hike in interest rates came just after the Bank of England loosened its affordability rules in an attempt to make it easier for people to get on the housing ladder.

Employment rates, how much people are earning, the cost of borrowing, the number of properties on the market and the willingness to lend are the main factors that affect house prices.

Generally, when the economy is doing well, people are in work, job security is stable and wages are higher. When interest rates are low, people are also able to borrow more cheaply and providing banks are willing to lend, more people will buy.

Are you thinking about selling a house in South Wales? I will make you a cash offer for any house in South Wales today. We buy any house in any condition. Call me direct on 02920 501 001 or click the button below.

Suggested reads:


Aerial-view-of-the-Welsh-town-Caerleon-in-Wales,-home-of-the-Roman-Amphitheatre
South Wales Residential Market Update – March 2024
The Bank Of England UK
Mid-March 2024 Mortgage Market Update
Property-Auction-Sales-Collapse-1
Property Auction Sales Collapse

Read more from the "Property Market News" category


Get a full cash offer for any house in South Wales today

Complete this short form. Please make sure the details are correct.

Name(Required)

Excellent service provided by Mark King Properties, very efficient and fast house sale service! - Robert Tylor, Barry

Google Logo ★ ★ ★ ★ ★
Cash Offer For Any House