Mortgages are at their most affordable in four years – but could rates drop even further?
- Portion of disposable income spent on mortgages has fallen
- Comes despite Bank of England base rate increasing in November
- With further rises on the cards, this could be the cheapest period to service a home loan for some time
Mortgage payments are at some of the most affordable levels seen in the last 20 years, a new study suggests.
Typical home loan payments accounted for 29 per cent of homeowners’ disposable income in the last three months of 2017, data from Halifax shows.
This compares to 48 per cent in summer 2007 and has been driven largely by historically low mortgage rates.
The lender says the average mortgage rate fell during 2017 from 2.09 per cent to 1.98 per cent.
Halifax adds the 29 per cent figure is the lowest it has recorded at the end of a full year in the last decade. The figure has been lower though more recently: in the second quarter of 2013 it dipped to 26.3 per cent.
Before that it is back to 1996, when 23.6 per cent of disposable income was spent servicing the monthly mortgage.