this post was submitted on 22 Jun 2023
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UK Politics

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Sunak will be feeling the pressure from this if inflation doesn't actually come down.

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[–] GreatAlbatross 2 points 1 year ago (1 children)

I remember looking at the 10% stress test on the paperwork and thinking "oof", but feeling a bit safer that people are at least being made aware of this when they take out a mortgage.

This was brought in last year to change the way stress testing on applicants runs. Previously, you had to be able to withstand 7% (iirc, don't quote me), it's now a 1% rise stress test, though the 4.5x salary limits still apply.

[–] mannycalavera@kbin.social 1 points 1 year ago

AHH interesting that makes more sense then because we remortgaged before those changes in the rules.

As an example, a borrower taking out a two-year fixed-rate mortgage at 2.2% with a revert to rate of 4% would need to show they could afford the monthly repayments on a rate of 7%.

I mean... they ain't going to be coming off onto the 4% 🥲 but stress testing at 7% should still (for the time being) mean that everyone with a mortgage should have been aware of the risks and budgeted accordingly. No?

No-one wants to pay more of course.... I have sympathy for that. I just don't understand the shock that some people are claiming.