October 2007 saw homeowners struggle with mortgage payments
June 19, 2008
Mortgage payers in the UK encountered a difficult month in October when it came to making mortgage repayments according to recent data from the Council of Mortgage Lenders. High interest rates and property prices, coupled with difficult credit conditions, saw many homeowners struggling with their mortgages in the month of October. According to the Council of Mortgage Lenders firsts time buyers were spending 20.6% of their income on mortgage interest in October compared to 20.4% in September.
For many of these homeowners the news of interest rates coming down by a quarter point earlier this month came as a relief, as it will provide extra breathing space for the many homeowners that have been struggling with their mortgage repayments. However, the interest rate cut is unlikely to make a huge impact on repayments, although further interest rate cuts are expected next year, which could help to ease the impact further.
An official from the Council of Mortgage Lenders stressed the importance of contacting the mortgage lender if you are struggling with repayments on the mortgage, but he also said: “For those customers coming to the end of their fixed-rate mortgage in 2008, the potential impact of higher monthly payments will be diminished by the fall in bank rate this month and other rate reductions to come early in the New Year.”
In the meantime Tory leader Michael Cameron has been urging lenders to be more understanding with borrowers that struggle with repayments in the current economic climate, stating that they should start looking at different strategies to help and deal with borrowers that are due to come off cheap fixed rate deals and could soon find themselves struggling with repayments.
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