If rates go up to 5% (which they probably will over the next 2-3 years) I'll be paying an extra £600 a month.
Annoying but not unmanageable.
If they go up to 7% that's an extra £1k a month. I'll feel that. That's getting into a reduced lifestyle and/or reduced saving capacity territory.
It they go up to 10% I can still service the mortgage and live but not a lot else.
At 13% the mortgage payment would = my salary. Could always cut pension contributions for a bit but basically beyond 12% I'd be pretty fucked!
Going to up my over payments for the next year until my fixed rate ends, when I also want to mortgage down to a shorter term (took our 30 years but want to move to max 25 years next year when i'll be 32)
Where it may hit is btl landlords who are on the margins of profitability already - for example because of the tax changes on interest deductibility, cost of new regulatory requirements and so on. So yes they may decide to sell while the going's (relatively) good. Or are most btl mortgages fixed rate? In which case it will take longer to work through.
Of course for buyers with fixed rate mortgages, they may find that when they come to remortgage their increased equity (if they are in an increased equity area) makes them eligible for a lower rate than last time anyway - so their payments may not go up that much.
Maybe the other effect is that people are now expecting them to go up again, so will be more cautious about how much they borrow - which would put some downward pressure on prices.
Not so much ftbs - they will still stretch themselves to the limit to get on the ladder I would have thought, but those further up the chain who don't have to move may be less willing to borrow the max allowed for their next move.
I read somewhere that 40% of mortgage payers are on variable rates - so that is a majority who won't be affected straight away - though will when they remortgage.
I think they will want to keep the rise slow. The question is whether they will be able to with inflation driven by the pound losing value internationally due to Brexit. There is precedent for interest rate rises not to work in tackling this, requiring further rises and further rises. But I'm not an economist, so I may be talking nonsense!