Mortgages in 2011 most affordable on record

by Aaron Strutt

Jan 13 2012

Lenders offering some of their cheapest mortgage deals ever helped to make homeowners' monthly mortgage payments in 2011 the most affordable on record, according to new research from Barclays.

The bank analysed over one million of their customers' accounts and found, on average, people paid just 15.4% of their take home pay last year to cover mortgage payments. The lowest point since records began 10 years ago.

Furthermore, a survey commissioned by Barclays found that just 40% of homeowners think interest rates will increase this year, compared to 74% who were asked at the beginning of 2011.

Aaron Strutt, a broker at Trinity Financial, says: “Mortgage rates are slightly more expensive than they were at the end of last year, but there are still a lot options available. Clydesdale Bank have a two-year fix at 2.89% and it has a £1499 arrangement fee - they are also happy to lend up to £2 million.

“Halifax has another low two-year fix at 3.09% and their lending criteria is often more flexible than other banks. The mortgage has a £999 arrangement fee and the maximum loan is £1 million.

“I think that many borrowers are unaware that they could qualify for a mortgage and that the banks have made large steps forward in terms of expanding their products.”

13 January 2012