Household debt when rates rise
Household debt and borrowing appear on 53 recent papers in the economics and finance journals, but only 9 of them carry an interest-rate, tightening, variable-rate or refinancing keyword. The 2022–2024 rate rises hit households with floating-rate mortgages hard in some countries and barely at all in others. Where did consumption fall, and did defaults follow?
What prompted this
Since October 2025, 53 papers carry a household-debt, household-borrowing, household-leverage or mortgage-debt keyword (29 in economics journals, 24 in finance): "household debt" on 32, "household borrowing" on 11, "household leverage" on 7. Only 9 of them also carry an interest-rate, rate-hike, monetary-tightening, variable-rate, adjustable or refinancing keyword.
Questions
- In countries with mostly floating-rate mortgages (Australia, Sweden, the UK), how much did consumption fall per point of rate increase, compared with fixed-rate countries (the US, France)?
- Did households that had refinanced at low fixed rates stop moving house, and what did that do to labour mobility?
- Did arrears rise where expected, or did savings built up in the pandemic absorb the shock?
Data that could help
Loan-level mortgage data with rate types, household spending from bank transaction data, and arrears statistics by country.
Next step
Compare quarterly consumption growth across countries by their share of floating-rate mortgages during the 2022–2024 tightening.