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Mortgage interest payments hit 15-year high

Mortgage interest payments for first-time buyers and home movers have reached their highest levels for 15 years, according to figures from the Council of Mortgage Lenders.

CML regulated mortgage survey data shows that first-time buyers in April were paying 18.7 per cent of their income on mortgage interest, the highest level since 1992. This is up from 18.3 per cent in March and 16.3 per cent in April 2006.

Home movers were also hit with the highest interest repayments in 15 years, reaching 16.3 per cent of income in April. This is up from 16.1 per cent in March and 14.4 per cent in April 2006.

The CML also points out 58 per cent of first time buyers were forced to pay tax on their purchases in April, up from 51 per cent in the same month last year.

CML director general Michael Coogan says: “Month on month we see affordability constraints for first-time buyers worsening. And with the impact of May’s interest rate rise still to be felt, many borrowers face higher costs in the coming months.

“The vast majority of borrowers will be able to absorb higher mortgage payments. But with two million fixed-rate loans coming to an end over the next year and a half, many borrowers should anticipate that their mortgage costs are likely to rise and should be planning ahead”.

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