Mortgaged Future: Modelling household debt affordability and access to re-financing as interest rates rise

Published on Housing, Wealth and Debt

One in ten of today’s mortgagors risk being imprisoned by borrowing deals which are likely to make their repayments unaffordable as interest rates rise over the next four years. Around 770,000 households are both at risk of being ‘mortgage prisoners’ due to a limited ability to switch to better mortgage deals and therefore insulate themselves against future rate rises, and at risk of being ‘highly geared’ where monthly mortgage repayments are eating up at least one third of their disposable income by 2018.


  • Around 2.3 million households might face affordability problems by 2018, with around 770,000 being further disadvantaged by potential prisoner status
  • Affordability is a bigger issue in London and the South East, but potential prisoner status is most pronounced in Northern Ireland
  • Lower income mortgagors are most exposed, but the affordability issue is set to stretch up the income distribution as rates rise


  • There is a need to make efforts to free mortgage prisoners where possible and protect them from the risk of unreasonable rate increases where necessary