Taking on mortgage deals becoming impossible for homebuyers

30/05/2007

Homebuyers are vary about remortgaging due to the fifth interest rate rise over a 6-month period, they feel trapped and some are suffering financially.

The Yorkshire Bank’s mortgage group showed that the Bank of England’s base rate increase has caused 24 per cent of homebuyers to cancel taking on a maximum mortgage deal.

First-time buyers are also finding it very difficult to get on the property ladder, Yorkshire Bank found out that 31 per cent of people were scared, they said if interest rates increased once again it would leave them unstable.

Nearly 70 per cent of people feel that house prices will continue to rise each month leaving only 17 per cent to disagree with this

Head of Retail at Yorkshire Bank, Gary Lumby, said: “What our survey shows is prudence, not panic - all the signs are that the market will still remain strong. But with rises in the Bank of England’s base rate, and with many economists predicting a further rise if not next month, then in the near future, it is inevitable that homebuyers will become more a little more cautious with their borrowing.

Even though the interest rate keeps on rising, Yorkshire bank have shown that homeowners are willing to suffer financially and buyers feel that owning a home is the most important part of their lives. Nearly 24 per cent said owning their property is the key and if losing the ‘high life’ cars, holidays, etc, they would have no option but to stop these extras.

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