Applications remain steady, but the lender says higher rates could cause 'significant drag' on the market.
The number of mortgage applications has not declined yet despite interest rates rising to the highest level in 15 years, Nationwide has said.
Rob Gardner, Nationwide's chief economist, told the BBC's Today programme that mortgage repayments were now taking up almost 40% of people's average take home pay compared to 30% previously. The impact of higher interest rates on mortgage holders is more gradual compared to previous times, as the majority of homeowners are on fixed-rate deals. Only 15% of mortgage holders are on deals linked to variable rates - compared to 70% 20 years ago.
"Clearly this represents a significant increase, but those borrowers were stress-tested at interest rates above those now prevailing in the market to ensure they could cope with such an increase," he said. "The new rules will mean people can make a temporary change to their mortgage to get them through the next six months, but there will be those who can't see any light at the end of the tunnel, and sell up," she said.
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