Although council house mortgages have been somewhat immune to the many problems facing the housing market, it appears as though their rates are also on the increase. Those who have a council house mortgage are finding it harder to keep up on their payments and there is concern on whether or not the government will need to step in to help keep them from foreclosure. Right now, council house mortgage are in nearly as bad a shape as the rest of the mortgage market. The trend is expected to continue and may even get worse as homeowners continue to struggle.
Melanie Bien, director of independent mortgage broker Savills Private Finance, said: “The escalating cost of two-year fixed-rate mortgages is bad news for borrowers. It effectively means less choice and less flexibility as they are forced into longer fixes in order to guarantee their monthly mortgage payments.”
Moneyfacts.co.uk’s mortgage expert Darren Cook, said: “The average two year fixed rate stands at 6.75%, the highest rate we have seen in the last 10 years. ‘Customers looking to fix their mortgage for five years are also paying the price as the average rate has increased to 6.72%.”
Related reading: Council House Mortgages
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