Latest mortgage deals are at their cheapest
Lenders latest mortgage deals have been made possible by lowest ever interest rates. Research shows that rock bottom interest rates have enabled mortgage lenders to offer their best deals ever.
According to recent research from Barclays Capital, mortgage payments in both England and Wales averaged £494 a month last year, making the latest mortgage deals on offer the most affordable for a decade. The study also suggested that most home-owners would cope with a Bank of England base rate rise. Around three-quarters who took part in the study, said they had a plan for when interest rates started to rise, around a third are planning 'lifestyle' spending cuts, including clothes, holidays and eating out to offset any increase.
Earlier in the month, the Bank of England predicted lenders would increase their mortgage range to borrowers but added that this would be offset by tougher lending criteria. The Bank's latest survey found lenders plan launch more innovative products, particularly for those with smaller deposits.
This could help first-time buyers, who have found themselves trapped in the rental sector. In autumn 2011 first-time buyers had the lowest proportion of the housing market for nearly three years.
Despite latest mortgage deals being at their cheapest, the report also said some lenders had revised in a downward direction their expectations for household disposable income, which would affect the affordability of taking out new loans.
