Base rate at 0.5% makes shared equity mortgages 'very affordable'

27-Jul-2010

Published by Helen Adams

Shared equity mortgages are currently relatively affordable due to favourable interest rates, one real estate provider has suggested.

Lucian Cook, director of Savills, notes the low base rate - which has remained at 0.5 per cent since March 2009 - means house purchase loans are "very affordable" at the moment.

A shared equity mortgage may help individuals join the market, as the housing specialist observes many have difficulty accessing finance and raising the deposit needed to buy a new home.

Dividing the costs might mean less time is needed to save the required amount, as well as reassure loan providers of the ability of borrowers to service the credit.

An Ernst and Young ITEM Club forecast released yesterday (July 26th) predicted interest rates are unlikely to rise within the next three years.

Peter Spencer, chief economic advisor to the club commented: "A base rate of 0.5 per cent will begin to look like the new normal."

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