Mortgage payments ‘on the increase’

Mortgage repayments have risen by 15 per cent over the past year, new figures reveal.

According to Barclay’s Woolwich Mortgage Affordability study, an average of £590 a month was paid towards secured and home loan costs over the course of April - during the same month in 2006 this figure stood at £512.

However, household earnings were reported to have risen by five per cent over this period, which in turn could impact upon consumers’ debt management and ability to make repayments on other avenues of borrowing.

Head of Woolwich Mortgages Andy Gray said: "With the costs of council tax, petrol, food and drink, as well as mortgages, all increasing consumers are seeing a large amount of their earnings being diverted to essentials, putting real pressure on disposable income.

Mr Gray added that despite concerns of an interest rate increase later this week, the three rises which have taken place since August 2006 are beginning to have "a major impact on borrowers".

Last month, Fionnuala Earley, chief economist for Nationwide, suggested that any future base rate increases could cause "widespread payment difficulties" for secured loan borrowers.

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