Mortgage Repayments Taking Up Less Of Household Budget
According to the Council of Mortgage Lenders (CML), a number of homeowners have to set aside less of their disposable income to cover their monthly mortgage repayments than they used to. This is no doubt, in part, due to the fact that lenders dropped their variable rates following the recent reduction in the base rate so many people that have a mortgage interest rate connected to the variable rate may have seen their repayments come down.
We are sure that you will agree that this will have been welcomed by many borrowers although some may have chosen to leave their repayments unchanged. The benefits in leaving the repayments as they were are that the mortgage is likely to be paid off sooner and they would pay less interest back to the lender over the term of the mortgage.
In September, not including first time purchasers, customers with residential mortgages had to commit an average of 17.7% of monthly income on meeting their monthly mortgage repayment. First time buyers had to set aside 17.8% of their monthly income to cover the monthly mortgage repayment.
The above may encourage more people to look to buy their first home rather than live in rented accommodation especially as rental costs have been on the increase of late. It may also encourage more homeowners to put their properties on the market and look to buy a larger property or perhaps seek a further advance from their mortgage lender to build an extension or carry out other home improvements.
There are many residential mortgage lenders in the UK so, if you are considering buying a property, you may wish to shop around to try to obtain a competitive mortgage package. You could either do your own research such as by searching on the Internet or arranging appointments with a number of high street banks and building societies or use a mortgage broker to help you source a suitable mortgage.