Mortgage rates can significantly impact the property market. When rates are low, borrowing is cheaper, which can encourage more people to buy homes. This increased demand can push property prices up. On the other hand, when mortgage rates rise, the cost of borrowing increases. This can discourage some potential buyers, leading to a decrease in demand and potentially causing property prices to stagnate or even fall. Moreover, high mortgage rates can impact affordability and make it harder for first-time buyers to enter the market.