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News
Variable Rates on the Up
October’s figures showed that people were turning away from fixed rate mortgages falling from 72% to68%.
All through 2007 fixed rate mortgages had been popular with levels continuously over 70%.
With the expectation of further base rate cuts it is likely that variable mortgages will become more popular as it will not be as necessary for people to ensure their mortgages do not keep rising with base rate increases.
Affordability in October was still a problem with mortgage interest payments at their highest levels for over fifteen years. First time buyers paid 20.6% of their income towards mortgage interests; this was up by 0.2% from September and figures for movers were up 0.1% from September, this was the highest since 1992.
Borrowers whose fixed rate mortgage will be coming to an end in 2008 will have the blow softened slightly by the recent bank rate cut.
Affordability should be adjusted in 2008 with house prices levelling and lower mortgage rates giving many first time buyers the ability to get a foot on the ladder.
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