Who escapes the great mortgage reset?

US mortgage rates hit 6 per cent this week, the highest level in 14 years, adding to fears about the housing market. But Americans live in a socialist paradise. Homeowners are shielded from rising interest rates by 30-year government-backed fixed deals. When rates fall, the mortgage can be refinanced, locking in cheaper payments. When rates rise, no pain is passed on.

Most of the world lacks this insulation. Refinancing at a higher rate…