Mortgage interest takes less income

According to new data released by the Council of Mortgage Lenders (CML) in November 2009 homeowners needed to use less of their income to pay for their mortgage interest.

On average the homeowner used 10.6% of gross income on their mortgage interest payments in November, compared to 11.1% in November.  A figure of 10.2% was recorded in the middle of 1996, but apart from this the November figure is the lowest debt burden figure for homeowners since the CML started recording the data.

For first time buyers the figure has reduced to 14.4% of gross income in November 2009 compared to 15.1% in October, which is the lowest figure since May 2004

The director general of CML Michael Coogan said:

“It is encouraging to see that mortgage interest payments are so affordable for home movers and first-time buyers. But with substantial deposits still needed to secure a mortgage, the market will continue to be relatively restrained for some time to come.

“With refinancing still unattractive or unnecessary for many borrowers due to continuing low rates, we are now seeing a much more house purchase-focussed market, a profile much more like the beginning of the Noughties than its latter years.”