First Choice Finance - Mortgage Broker First Choice Finance Compare Home Owner Loans
First Choice Finance - Mortgage BrokerCompare Home Owner Loans


Brits have mortgage debt worth 4.5 times income

Brits have mortgage debt worth 4.5 times income

 



Video transcript

More than one million homeowners have mortgages worth four-and-a-half times more than their income, according to new figures but rules brought in in 2014 may reduce this for future borrowing.

New figures from the Office for National Statistics reveal how much mortgage debt households are actually sitting on, and the data is quite shocking.

More than 1.1 million households were saddled with mortgage debt worth four and a half times more than their income in 2013, which was slightly less than 2011, but still a concern. This means that almost one in seven mortgaged households were burdened with a large amount of debt. 

The figures from the ONS paint a picture that suggests that some mortgage borrowers could be at risk if the Bank of England decides to hike interest rates, as they may no longer be able to afford to live in their homes.

Unsurprisingly, one quarter of these households were located in London, while a further 27% were in the south east demonstrating how unaffordable the capital is becoming when it comes to buying property. 

Speaking to the Guardian, Matthew Whittaker, the chief economist at the Resolution Foundation thinktank, said that it is worrying that the number of homeowners sitting on mortgage debt that is high compared to their earnings has only fallen slightly between 2011 and 2013, as interest rates have been at record lows.

He explained that now a rate rise is high on the agenda `it`s vital that banks engage with their customers to explain how their mortgage repayments could rise`.

Since the financial crash of 2008, there have been a host of new regulations and rules passed to ensure mortgage lending becomes tighter so people are not given more money than they can feasibly pay back. 

In April 2014, tougher rules were enforced under the Mortgage Market Review, which forced lenders to check the spending habits of homebuyers and those looking to remortgage their homes to ensure that any loans issued were actually affordable. 

They are also now obliged to apply `stress tests` to applications to see if the monthly repayments would still be easily paid if interest rates were to increase.

Interest rates have been a hot issue for many, which can be seen in the fact that many people have rushed to get cheap mortgages before they disappear from the market, as rumours suggest the Bank of England is poised to hike rates. 

For those worried about what will happen and seeking payment stability before the Bank Of England does pull the trigger, it could be time to look around to see if there is a better deal elsewhere.

Homeowner Secured Loans
Rates From 7.1% APRC Representative Example £30,000 over 72 months @ £679.90 repayments. Total payable of £49,949. 20.1% APRC including £2,975 intermediary fee and a £995 lender fee. Loans secured on property. First Choice are tied to certain loan providers.

Mortgages & Remortgages
4.5% APRC
Representative Example: Borrow £80,000 over 25 years At 4.6% Variable, £461.95 for 300 months.
Total Payable £138,585. Total Cost Of Credit £58,585 (incl £1360 fee).


Unsecured Personal Loans
REPRESENTATIVE 49.9% APR (VARIABLE)
First Choice are tied to certain unsecured lenders.


THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
Security is required on immovable property.



Established In 1988. Company Registration Number 2316399. Authorised & Regulated By The Financial Conduct Authority (FCA). Firm Reference Number 302981. Mortgages & Homeowner Secured Loans Are Secured On Your Home

First Choice Finance is a trading style of First Choice Funding Limited of The Old Courtyard, 103 Buxton Road, High Lane, Stockport, Cheshire. SK6 8DX. Copyright protected 2014.


  Best Deals & Latest News

Debt Consolidation Remortgages & Loans

Release Equity Via A Remortgage or Loan

Mortgage & Remortgage LTV Calculator

Reasons Why Mortgages May Be Rejected

Remortgage With Bad Credit

Online Home Loans
Secured Loans and Remortgage Advice
Loan or Mortgage Application

Loan Plans

Mortgage and remortgages - Best Buys

Buy To Let

Are you looking for a?buy to let mortgage? Get expert help and no obligation free quotes from First Choice Finance with 25 years experience helping people find loans mortgages and remortgages.



Retirement Mortgages