The Bank of England says it expects the proportion of income that UK households spend on mortgage payments to remain below levels seen during the financial crisis.
Its latest Financial Stability Report declared that squeezed households were proving resilient in the face of challenges posed by rising living costs and interest rate hikes to tackle high inflation.
But it warned that it would take time for the impact of rate increases to feed through.
Just a day after data from Moneyfacts revealed that average two-year fixed mortgages had hit a 15-year high, the bank’s financial policy committee said lenders and borrowers alike were well placed to manage the additional costs.
“Although the proportion of income that UK households overall spend on mortgage payments is expected to rise, it should remain below the peaks experienced in the Global Financial Crisis and in the early 1990s”, the report said.
It also revealed that banks had passed its latest series of stress tests.
