First time buyers paying more interest

12/06/2007

Mortgage interest payments have been forced upwards by high interest rates for first-time buyers. Survey brought forward by CML indicated that first time buyers during April were paying a staggering 18.7 per cent of their work income simply on interest via their mortgage deals.

This was the highest data recorded since 1992. High interest rates also affected home movers when in April they paid 16.3 per cent on interest rates, again the highest peak for a 15 year duration.

Looking at today’s figures, CML Director, Michael Coogan said: "Month on month we see affordability constraints for first-time buyers worsening. And with the impact of May's interest rate rise still to be felt, many borrowers face higher costs in the coming months.

"The vast majority of borrowers will be able to absorb higher mortgage payments. But with two million fixed-rate loans coming to an end over the next year and a half, many borrowers should anticipate that their mortgage costs are likely to rise and should be planning ahead," he added.

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