🏠 The average person will now be spending more than a quarter of their income on their mortgage as rates creep past 6%
of their income on their mortgage as rates creep past 6 per cent.
The typical two-year fixed mortgage is sitting at 6.16 per cent after a hike in interest rates, and is more expensive than the average five-year deal of 6.07 per cent,Earlier this year, homeowners were spending far less of their income – at around 17 per cent – as mortgage rates sat at just over 2 per cent, according to data from BuiltPlace.
The ratio of income to loans has largely been around 15 per cent since the noughties but this changed briefly in 1990, when it hit 28 per cent., rates have soared, leaving many concerned about how they can afford their bills. The one ray of light for anyone with a home loan or hoping to get one is that lenders are starting to come back to the market. As they do, it is hoped rates will start to decrease with lenders not as worried that they will end up with more customers than they can deal with.Accord has announced a five-year fix with a 25 per cent deposit, which has a rate of 5.95 per cent and one for someone with a 15 per cent deposit with a rate of 6.05 per cent.
Santander also returned on Monday, increasing rates on its fixed-rate products by 1.5 per cent for new customers. It added it will soon be reintroducing loans for people with 5 per cent deposit plans shortly.
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