Mortgage interest rises sharply

The average interest paid on a mortgage increased markedly between December 2006 and November 2007.

New figures from mform show that the amount of interest paid increased by 17.6 per cent in that time.

That equates to an increase of £1,159 in the year, taking the total to £7,747 from £6,587.5 prior to December.

Mform said that the increase is not down to people taking out larger loans but is the result of lenders increasing their rates.

Francis Ghiloni, marketing and business development director said: "With the current credit crisis, the cost of borrowing has increased dramatically, and this has fed through to homeowners who now have to pay much more for their mortgages.

"An increase of 17.6 per cent in mortgage interest repayments is a huge hit to any family budget, which many homeowners are finding difficult to cope with," he continued.

The Bank of England's Monetary Policy Committee (MPC) is due to meet in early February in order to decide upon the base rate of interest for the month.

Related Articles