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.

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