Mortgages are now cheaper than they’ve ever been, based on the Council of Mortgage Lenders (CML).
Eight years ago, when interest rates were considerably higher, they spent 23.7% of their income on repayments.
The CML said the figures should help more folks to purchase their own house, and represented a historic low.
Low rates
When interest rates were as high as 17% a year the percentage of household income would have been higher in the 1970s and 80s, the CML said.
Two-year fixed rates are at present available for as little as 0.99%.
“This should help turn the strong desire for homeownership into a reality as we approach the closing months of the year.”
The days of the ultra-low-cost mortgage could be numbered.
Building societies and banks are eager for us to observe the fact that loans for houses have not been more affordable.
But the success of Donald Trump may indicate a turning point for the lowest fixed rate offers.
The cost of fixed rates is dependent upon the deals which lenders can negotiate in the City.
And swap rates – which were creeping up – have jumped since the success of Trump.
It is part of a remarkable shift in expectations about rates of interest if the President-elect presents on his promise to double the growth rate of the US market.
Individuals are calling substantially higher US rates in the long run, with a knock-on effect across the world.
Mortgage specialists here are discussing increases of around 0.25% in five- and 10-year fixed rates over the next few days, with more rises to follow.
Nevertheless, increasing house prices mean the entire value of loans has increased drastically over the last few years.
