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Mortgage affordability at five year high

Mortgage affordability at five year high

Category: Mortgages

Updated: 14/01/2010
First Published: 14/01/2010

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Home buyers in November had to use less of their income to cover their mortgage interest than at any time for more than five years, according to the latest figures from the Council of Mortgage Lenders (CML).

Home movers in particular were found to be experiencing a low debt burden by historical standards, typically needing only 10.6% of gross income in November to cover mortgage interest payments, down from 11.1% in October.

Other than a brief low of 10.2% in the middle of 1996, it is the best affordability figure reported for home movers since the CML started recording such data in 1974.

The debt burden on first time buyers also reduced, with 14.4% of gross income needed in November, down from 15.1% in October and the lowest reported since May 2004.

"It is encouraging to see that mortgage interest payments are so affordable for home movers and first time buyers," said CML director general, Michael Coogan.

"But with substantial deposits still needed to secure a mortgage, the market will continue to be relatively restrained for some time to come."

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