It’s no surprise to many homeowners that mortgage repayments in the UK are the most affordable they have been for a decade but now Halifax have brought facts to prove it.

The mortgage lender’s latest price index shows that typical mortgage payments accounted for less than one third of the homeowners’ disposable income in the last quarter of 2017, compared to almost half in 2007 (48%).

This is particularly good news for first-time buyers although anyone with a large mortgage is also benefiting significantly from this historically low lending rate, brought on after the credit crunch in 2007/8.

Of course what goes down will, eventually, go up, and prudent borrowers are encouraged to make plans for future increases either by making over payments (when possible and allowed in their loan agreement) or by saving money for tighter times ahead.

Many are now predicting that the year end will see mortgage rates rising modestly in the UK. Whilst ½% or so might not seem much, it represents a relatively large increase on the Bank of England’s Base Lending Rate and it will have a detrimental effect on those with fixed or capped rate loans coming to an end.

Of course, the story is less simple than this with regional differences telling different stories across the Country. Affordability does not just depend on interest rates. It also depends on net household income and the size of the mortgage amount. The average mortgage in parts of London and the South East, where house prices are likely to be relatively much greater, is likely to be much less affordable than in parts of the North and the Midlands.

If you are considering locking in to a new rate before any increase, now’s the time to speak to our team of mortgage advisers in Maidenhead on 01628 507477.

Related articles:

Download our Free First Time Buyers Guide

Recent posts

The government has announced plans to make buying or selling a home cheaper and quicker with what is being called the “biggest shake-up to the homebuying system in this country’s history.”

Almost one in five equity release mortgages are now taken out to provide financial support to family.

According to industry data, the expected wait for those looking to buy a property has dropped from just over 11 months to less than six months.

It is common for your first mortgage payment to be higher than your subsequent monthly payments for two reasons.

Firstly, a big congratulations, you’ve now exchanged contracts! After weeks and months of waiting, you are about to move in. What should you do first?

The chancellor will deliver her second budget this autumn. Due to slow economic growth and high inflation, the government need to manage a £40 billion shortfall in public finances. There have already been reports about changes to taxes including income tax and capital gains tax.

The chancellor has advised that landlords could have another tax to pay this autumn as the Treasury decide whether to extend national insurance contributions to rental income. 

According to a report in the Guardian, senior ministers have asked Treasury officials to look into a “proportional” property tax to see how it would work as an alternative to the existing stamp duty land tax on owner-occupied homes.