How would 6% mortgage rates affect affordability?
Rightmove has issued new predictions if mortgage rates were to increase to 6%.

Based on the average current salary for a first-time buyer with a 10% deposit, the average monthly mortgage payment would rise to £1,302 if the average mortgage rate rose to 6% for a 90% LTV two-year fix.
This monthly payment would be 60% higher than those getting on the ladder at the start of 2022.
For two people buying a first home together and splitting the £1,302 payment, the monthly payment each of £651 would equate to 25% of their gross average salary, up from 15% at the start of the year.
The last time the average mortgage rate was 6% on a 90% LTV two-year fix was in May 2012, when the average asking price of a first-time buyer home was £142,686. Back then the average monthly mortgage payment on a first-time buyer home was £833, which was 21% of the average gross salary for two people splitting the payments.
For a solo first-time buyer, the average lending criteria of 4.5 x their salary means they would need to be earning £45,000 to buy a home at the average first-time buyer price of £224,479. If rates rose to 6% this would equate to 35% of their salary, up from 22% at the start of the year.
However Rightmove says that despite affordability challenges, demand for first-time buyer homes is up 27% on the pre-pandemic five year average.
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