Mortgages 'will be affordable' if interest rate stays low

Posted: 27 Jul 2010 10:56:52 GMT

Mortgages will continue to be "very affordable" if interest rates stay at an historic low.

>That is the view of Lucian Cook, director at Savills, who said those with deposits will be able to get a good deal on a home loan.

"In the current environment, it is not whether they can service the mortgage; it is whether they can raise the deposit to move," he added.

Mr Cook also noted there has been movement from "mortgage interest affordability to deposit affordability".

He explained the housing market was originally based on individuals being able to get finance and this was reflected in how much they could spend on a dwelling.

The specialist's comments follow the release of the latest Ernst and Young ITEM Club prediction, which claimed interest rates will probably not go up before 2014.

According to the forecast, it will be necessary to keep the Bank of England base rate low of 0.5 per cent for much longer than the markets or Office for Budget Responsibility expected.


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