Abacus Daily Debt News

Mortgages ‘at cheapest level since 2004′

The cost of borrowing a mortgage has fallen to its lowest level since 2004, according to a new report.

Figures from the Council of Mortgage Lenders (CML) also revealed that there were 18,900 home mover loans approved in March, a rise of 27 per cent on February’s figures.

Despite this, the body noted that many borrowers still need to build up large deposits before being able to obtain a mortgage.

But they are benefiting from the current low level of interest rates, it explained, with typical home movers using 11.4 per cent of their income to make repayments.

"There is a sharp dividing line in the housing and mortgage markets between those who can raise a substantial deposit and those who can’t," commented CML head of research Bob Pannell.

However, he added that "the burden of debt payments is low" for people who can access mortgage finance.

Meanwhile, Royal Institution of Chartered Surveyors chief economist Simon Rubinsohn has predicted that house prices will level out later in 2009.

By Jamie Price