Finance News From Shakespeare Finance
Saturday, 07 Apr 2007
Interest rate rises troubles mortgage loan applicants
More than 460,000 home loans have been turned down in UK in the past six months due to the mounting base rate of Bank of England.
April 7' 06, London: A new research conducted by a leading financial website reveals that 460,000 applicants have been turned down by mortgage firms in the past six months. The Bank of England has thrice increased its base rate that has hiked from 4.5% to 5.25% since August 2006. This has added around £750 to the annual cost of of an average £100,000 variable rate mortgage.
Speculations in the market project that the interest rates on mortgages may increase further as well. If this happens, 77,000 applicants will be turned down each month. The persistent hike in the base rate, decided by the Bank of England, has thus, adversely affected the mortgage market in the UK.
According to the Chief Executive of the financial website that conducted the research, "Affordability is the major issue in the mortgage market... The fact that around 77,000 mortgage applications are being rejected a month means it is likely that it is not only first-timers who are being hit. Lenders quite reasonably do not want to take risks when there are pressures on how much people can afford."
He further added that homeowners should also consider secured loansif they are looking to raise money. Rising house prices mean they have equity in their home and if they do not need to move home a secured loan can be a viable alternative as rates are now very competitive.
April 7' 06, London: A new research conducted by a leading financial website reveals that 460,000 applicants have been turned down by mortgage firms in the past six months. The Bank of England has thrice increased its base rate that has hiked from 4.5% to 5.25% since August 2006. This has added around £750 to the annual cost of of an average £100,000 variable rate mortgage.
Speculations in the market project that the interest rates on mortgages may increase further as well. If this happens, 77,000 applicants will be turned down each month. The persistent hike in the base rate, decided by the Bank of England, has thus, adversely affected the mortgage market in the UK.
According to the Chief Executive of the financial website that conducted the research, "Affordability is the major issue in the mortgage market... The fact that around 77,000 mortgage applications are being rejected a month means it is likely that it is not only first-timers who are being hit. Lenders quite reasonably do not want to take risks when there are pressures on how much people can afford."
He further added that homeowners should also consider secured loansif they are looking to raise money. Rising house prices mean they have equity in their home and if they do not need to move home a secured loan can be a viable alternative as rates are now very competitive.
