Wednesday, Jul 19, 2006

Bigger issue than HIPS on the way, even a 0.25% rise is predicted to cause damage

Firstrung: First time buyers will need to spend 50% of salary on interest re-payments if rates rise by just 0.25%

Someone on average earnings buying an averaged priced property with a 20% deposit can expect to spend nearly half of their take-home pay on mortgage interest repayments if the cost of borrowing rises. A 0.25% rise in interest rates to 4.75% before the end of the year, would mean a typical buyer had to spend 49.8% of their salary on interest repayments alone, said lender Cheltenham & Gloucester, the highest level since 1991.

Posted by converted lurker @ 10:49 AM (537 views)
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3 Comments

1. Retiredbanker said...

I think this is called " stating the blindingly obvious", and is why the Government is so anxious to avoid a
rise in interest rates.

Hardly a revelation to the bloggers on this site!

Wednesday, July 19, 2006 04:13PM Report Comment
 

2. The Bald Man said...

How can interest rate rises be avoided? Change the inflation index again?

Wednesday, July 19, 2006 05:06PM Report Comment
 

3. European-bear said...

And that is just the interest....how are these people ever going to pay back the capital?

Thursday, July 20, 2006 07:06AM Report Comment
 

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