Mortgages 'are becoming more expensive'
Published On 30 May 2007
More and more people in the UK are prepared to make financial sacrifices to cover high repayments on large mortgages, a new study suggests.Figures from the Yorkshire Bank indicate that almost a quarter (24 per cent) of homebuyers would cut back expenditure to afford a mortgage on a new home.
For first-time buyers, the situation is more severe. Nearly a third (31 per cent) said they will have to reduce their spending to make mortgage repayments - especially as many expect interest rates to increase.
Despite this, just three per cent of the people the lender questioned said they were thinking about looking for a cheaper mortgage deal.
"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," explained Gary Lumby, Yorkshire Bank's head of retail.
"What we're seeing is buyers being shrewder than when the housing market was at its most buoyant, both in the price they’re prepared to pay for a home and how they choose to finance it."
Figures released earlier this year by the Council of Mortgage Lenders showed that first-time buyers now have to spend 18 per cent of their salary servicing the interest on their mortgage.
