Martin Ellis says that most UK households coming off fixed rates will see their monthly payments rise by no more than £65 and £90.
This he says the majority of borrowers should be able to absorb “without too much pain”.
Speaking at a Halifax media event last night, he says: “A lot has been written about repricing. A lot of the figures bandied around how big that payment shock will be are misleading.”
Although the Bank of England yesterday revealed that mortgage applications had dropped by almost 40% over the last year, he says with unemployment remaining at historic low levels house prices should still hold.
Making the comparison between now and the late 80s and early 90s, at the start of the last recession, he says 2007 housing market was in a considerably stronger position.
He adds: “We’ve had a look back over the data and what happens to unemployment is really the main driver to the housing market.”
Unemployment doubled between 1990 and 1993, rising from 1.5 million to three million. By contrast, at the last count there were 1.61 million unemployed in the UK and falling – it was 1.69 million just under a year ago.
Along with low interest rates, the way current products were also designed would also negate against the impacts of payment shock.
With no fixed rates in the late 80s, stretched borrowers were unable to lock their mortgage payments at a set price. By contrast the overwhelming majority of loans taken out in 2007 he says were fixed rates.
By the same token, in the late 80s 35% of mortgages were 100%, where as just 5% of the current market are made up of 100% loans.
Ellis adds: “We are confident about the position of the UK housing market.”