Mortgage lenders turn screw on homeowners
Mortgage lenders turn screw on homeowners
Thursday 21st August 2008
Research conducted by mform.co.uk found that the cost of the cheapest home loans available to UK consumers has risen by 0.64 per cent over the last 12 months.
This has brought the rate on the average best-buy mortgage deal to 6.34 per cent - up from 5.7 per cent during August last year.
As a result, homeowners are paying out an extra £720 per year on a £150,000 mortgage on a capital repayment basis.
Francis Ghiloni, marketing and business development director at mform, said: "We are living through a period of inflating prices and mortgages are no exception.
"The Bank of England can cut rates but as we have seen over the past year there is no guarantee this will translate into a lower true cost of mortgages at least in the short term."
Higher repayments on home loans are expected to contribute to a surge in demand for Individual Voluntary Arrangements (IVAs), which can help ward off repossession through prioritising mortgage repayments.
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