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Cheap mortgages becoming rarer for homeowners

Date: Tue, 21 Jun 2005

Cheap mortgages may become a rarity for some homeowners, according to new industry figures.

A survey from Woolwich discovered that property owners are now spending around a fifth of their income each month on meeting their mortgage repayments.

In the month of May, home owners spent around 18.5 per cent of their salary on mortgages, compared to 18.3 per cent in April.

However, the majority of repayments are still affordable for many households and levels remain well below those seen in the previous decades.

"The mortgage affordability numbers show that the concern expressed by some commentators about affordability is probably overdone," said Andy Gray, head of mortgages at the Woolwich.

"Much has been made of the current house price to earnings ratio being at a record 6.32, up from 4.9 in the 1990s and the similar levels seen at the beginning of 2002 when our data set began."

Mr Gray added that the data shows that mortgage burden increases remain slow and improvements in loan terms have helped to stabilising repayments.

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