The research asked 10,005 current and prospective homeowners across 10 countries about how significant increases in interest rates would impact their finances – with 1,000 respondents from the UK.
One in six, or 16% of UK respondents, said they would struggle or not be able to afford their mortgage repayments should interest rates increase by 2%.
This is the lowest percentage behind China, where 13% said they would face difficulties – the highest was France, with 36%.
Globally, an average of 22% said they would struggle with such a hike.
When asked about their finances in the scenario of a 5% interest rise, 35% of UK homeowners said they would be in trouble – the lowest of the countries surveyed – against the global average of 47%.
Tracie Pearce, HSBC UK’s head of retail products, commented: “Interest rates have been at historic lows for many years, and many people who got onto the property ladder in the last decade have never experienced anything else.”
She continued: “In fact, the recent increase in the UK’s Bank of England Base Rate would be the first time they have seen one.
“Many homeowners are heading into unchartered territory having entered the housing market with record low mortgage rates.
“They may have taken out a fixed rate that is due to come to an end or are on a tracker rate and will possibly see their rate creep up over time.”
Affordability woes
Globally, households spend an average 38% of their monthly income on their mortgage, compared with 34% in the UK.
However, affordability issues are more pronounced in the UK, with 84% of prospective homebuyers finding it difficult to save for a deposit, against the global figure of 80%.
The research also showed 69% of prospective buyers plan to pay up to 20% of the purchase price as a deposit, with 78% relying on their regular savings.
Owners in the UK took on average four years to save for their deposits, against the survey wide average of five years.
Pearce commented: “While it is positive to see UK homeowners’ resilience and confidence in their finances, it’s important they are conscious of potential interest rate rises and how they might affect household budgets.”
“Customers will have their own views on where they should be spending their spare cash, but with the average homeowner already spending one third of their monthly income on their mortgage, some might benefit from taking stock, thinking about changes they would make if they needed to and shopping around for a better deal,” she added.
Financial resilience against rate hikes by country:
| Country | Would struggle or not be able to afford a 2 point rate rise | Would struggle or not be able to afford a 5 point rate rise |
| Average | 22% | 47% |
| China | 13% | 37% |
| UK | 16% | 35% |
| Australia | 18% | 41% |
| Taiwan | 18% | 48% |
| Canada | 20% | 48% |
| Singapore | 22% | 54% |
| USA | 24% | 45% |
| Mexico | 26% | 51% |
| Malaysia | 27% | 51% |
| France | 36% | 57% |
