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Changes to mortgage system "welcome"

The government's proposal to review the flexibility of mortgage funding has been applauded by the Council of Mortgage Lenders (CML).

Outlining his plans to increase home affordability in parliament yesterday, new prime minister Gordon Brown confirmed that the government will attempt to improve the availability of long-term fixed-rate mortgage deals.

Chancellor Alistair Darling had already hinted that this would be a significant part of the new cabinet's housing policy earlier in the week, due to the growing dissatisfaction with mortgage lenders offering only short-term deals and repeatedly charging high arrangement fees.

"It is too early to say whether these announcements will create a significant shift in the design of the mortgage products of the future," commented Rob Thomas, CML senior policy adviser.

"We welcome the government's willingness to look at the funding side and we also welcome the renewed focus on increased housing supply," he added.

Rising interest rates have put increased pressure on mortgage holders in recent months, with the CML announcing that around two million borrowers will be coming off fixed-rate deals in the next 18 months to face much higher monthly repayments, something which a personal home loan may be able to help with.

See how much you could borrow with a home loan from Lombard Direct.

12/07/2007 17:09:02

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