Cost of servicing mortgage debt `lowest since 2004`

The average cost of servicing mortgage debt is at the lowest point since 2004, the Council of Mortgage Lenders (CML) has revealed.

With lower interest rates and lower house prices, servicing mortgage debt is taking up a lower percentage of the average homeowner`s monthly income.

`First-time buyers on average borrowed three times their income and 75% of the value of their property in March`, a press release from the CML states.

`For those with deposits large enough to enable them to buy,` it continues, `the combination of low interest rates and lower house prices mean that their monthly interest payment now equates to only 15.1% of their income, the lowest proportion since June 2004 (15.1%).`

However, CML head of research Bob Pannell warned homeowners to think ahead to the time when interest rates rise and the cost of servicing mortgage debt goes up with them.

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