Mortgage payments hit 13 year low
New homeowners are spending less now than they did a decade ago on mortgage payments.
Figures from Council of Mortgage Lenders (CML) have found that, on average, new borrowers who bought a home in November spent less than 11% of their income on paying the interest element of their mortgage.
It is the lowest level for 13 years and the second lowest since records began in 1974. The CML attributed the current low level to a combination of lower mortgage rates and a change in the type of deals people took out during the month.
The CML said home movers spent just 10.6% of their income on paying their mortgage interest in November, the lowest figure since a brief spell in 1996 when it dropped to 10.2%.
CML director general, Michael Coogan, said it was encouraging to see that mortgage interest payments are so affordable for home movers and first-time buyers. But with substantial deposits still needed to secure a mortgage, the market will continue to be relatively restrained for some time to come.
He added that with refinancing still unattractive or unnecessary for many borrowers due to continuing low rates, we are now seeing a much more house purchase-focused market, a profile much more like the beginning of the Noughties than its latter years.