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CPD: Mortgages

The latest edition of Newsbrief counts as 1 hour of structured CPD and covers the regulatory and marketplace changes that took place during August 2014. Visit the Money Marketing CPD Centre to answer 10 multiple choice questions and complete this CPD activity. Just click into your CPD Plan and you’ll find each month’s marketplace changes round-up in your activity list.

September CPD Newsbrief — Mortgages

Mortgages

30-year mortgage applications rise with house prices

Devraj Ray

Rising house prices may be forcing borrowers to apply for longer-term mortgages of 30 years or more to reduce their monthly payments.

The Sunday Telegraph reports that 20 per cent of the 171,000 new mortgages taken out between April and June were for 30 years or longer, compared with 18 per cent in the previous quarter, according to data from the Council of Mortgage Lenders (CML).

First-time buyers are also spreading their payments over longer terms, with 28 per cent of all new first-time loans in Q2 taken out over 30 years or more, compared with 26 per cent in Q1. Ten years ago, only 4.5 per cent of all new mortgages were for more than 30 years.

The CML believes borrowers are opting for longer-term mortgages in the wake of rising property prices and fears of a hike in interest rates, which mean borrowers are struggling to meet their monthly payments. It says the increase in 30-year mortgages is also due to the Mortgage Market Review making affordability checks tougher to pass.

In July, Bank of England deputy governor Andrew Bailey warned longer-term mortgages could create a problem for borrowers, should their income fall in later life. “We have to watch this very carefully, because if mortgages extend beyond the point at which people’s income falls off, then we have a long-term problem.”

www.cml.org.uk/cml/home

September Newsbrief

The latest edition of Newsbrief counts as 1 hour of structured CPD and covers the regulatory and marketplace changes that took place during August 2014. Visit the Money Marketing CPD Centre to answer 10 multiple choice questions and complete this CPD activity.

Just click into your CPD Plan and you’ll find each month’s marketplace changes round-up in your activity list.

Not yet registered? Join for free today at www.ifacpd.com and access more than 35 hours of independent, accredited CPD learning content. 

Learning objectives (full list of ApEx standards covered below)

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