Mortgages 'to be more affordable in 2010'

Date:Thursday 31st December 2009
Author: Max Freedman

Mortgages will be more affordable next year, according to Nationwide.

Giving the forecast for the next 12 months, the building society believes that the current trend for products having low interest rates will continue to make them available for more people in 2010.

Overall, house prices have remained quite high this year, when they are compared to the average earnings.

Although it is thought that the Bank of England will not raise the base rate until the second half of next year, experts think that interest rates could still increase sooner. However, this will depend on if the pound becomes weaker and inflation increases.

However, there are concerns that the current low rates on fixed-rate mortgages could end if the government increases its borrowing in the new year.

Nationwide has launched a range of its own low-rate mortgages this year, including a two-year fixed-rate product, which is on the market at 3.69 per cent, with a loan-to-value of up to 70 per cent.