Across Europe, borrowers looking to secure new mortgages or refinance existing ones have found their payments soaring on the back of sharp rises in central banks’ interest rates. For those already on the housing ladder, there are vast differences in levels of protection against higher rates. Much depends not only on variations in rate-setters’ levels of aggressiveness but also on divergences within national mortgage markets. Even within the single currency area, borrower preferences and the products lenders offer diverge dramatically.
“People coming off their fixed rate from less than 2 per cent have that reaction of ‘Wow, that’s my new monthly repayment?’,” said Mendes who works at London-based company John Charcol.