Mortgage interest payments 'more affordable'

Date:Thursday 14th January 2010
Author: Max Freedman

Interest payments on new mortgages hit a five-year low in November in relation to household income, the Council of Mortgage Lenders (CML) has revealed.

The organisation published figures this week showing that first-time buyers had a debt burden worth 14.4 per cent of gross income during the month - the lowest proportion since May 2004.

Meanwhile, home movers had a debt burden of 10.6 per cent, which is the second lowest proportion since the CML's records began in 1974.

Michael Coogan, director general of the body, said it was "encouraging" mortgage interest payments had reached such affordable levels, but warned this does not mean every part of the home buying sector is in good shape.

"With substantial deposits still needed to secure a mortgage, the market will continue to be relatively restrained for some time to come," he remarked.

Discussing mortgages last week, Ben Wilkie of What Mortgage suggested an increasing number of lenders will follow the recent trend of raising their standard variable rates in the coming months.