October 31st, 2023, Kineree Shah
Last week, the average interest rate on the typical 30-year fixed rate home loan rose to 8%, the highest in two decades. As we delved into how these hikes impact the decisions of mortgage holders, YouGov Surveys: Self-Serve unveiled some telling trends.
We polled 2000 American mortgage holders. A quarter with variable-rate mortgages are considering selling their property due to the recent rise in interest rates (24%) but when it comes to fixed-rate mortgage holders only 4% say yes.
Among those with a variable rate mortgage, a significant proportion - about two in five - say they have intentions of switching their mortgage deal in the near future (39%). Of those with a fixed-rate mortgage, only 4% are considering switching meaning the vast majority (91%) are not so inclined.
When these variable rate mortgage holders were asked about the type of mortgage deal they would like to switch to, two-fifths said fixed-rate mortgages (39%) while more than a quarter prefer to stick to variable-rate mortgages (28%). One third remain uncertain about their next move. For holders of current fixed-rate mortgages aiming to switch, seven in 10 say that they would continue with a fixed-rate offer.
The broader economic implications of rising interest rates are not just confined to mortgage decisions. One in five variable mortgage holders say they are making large cuts in household expenditures (22%) while more than half have resorted to minor reductions (54%).
In comparison, fixed-rate mortgage holders seem less perturbed. Nearly half continue without any alterations to their household expenditure (48%) while two in five (38%) have made minor adjustments. Still, about one in eight (13%) fixed-rate mortgage holders have made significant spending cuts in household expenditure.
Methodology: YouGov polled 2000 US adults online on September 28, 2023. The survey was carried out through YouGov Surveys: Self-serve. Data is weighted by age, gender, education level, political affiliation, and ethnicity. The margin of error is 1% for the overall sample. Learn more about YouGov Surveys: Self-serve.