Debt advice: Mortgages 'becoming more affordable?'

28/01/2010

Britons spent 20 per cent less as a proportion of their monthly income paying off mortgage debt in 2009, new figures have suggested.

The data from Barclays bank revealed that homeowners in England and Wales made an average saving of £110 per month over the last year.

Monthly repayments now stand at £497 on average, compared to £607 in December 2008.

In addition, the study found that the largest fall in mortgage repayments was seen in London, while the lowest was discovered in the north-east of the country.

Andy Gray, head of mortgages at Barclays, said: "For the 11 million UK households who have a mortgage there is a silver lining to the recession - a substantial reduction in mortgage payments right when they need it most.

"For them it's a chance to save in a way they might not have been able to before, or to overpay their mortgage and cut years from its life."

Kevin Still director of EuroDebt commented: "Interest rate reductions have benefited many homeowners and potentially allowed them to, for example, compensate for rising household expenditure or clear down credit card debt.

"The problem arises when the mortgage rates go back up and disposable income is reduced. Many homeowners have been reliant on the low interest rates and may have deferred debt management problems in to 2010 or 2011. Clearing down unsecured debts remains a sensible option, as credit card rates continue to go up." ADNFCR-1819-ID-19584146-ADNFCR