Newcastle Building Society comments on mortgage monitor report

Steven Marks, Lending and Operations Executive at Newcastle Building Society, comments:

"I would be interested to see the basis of the Mortgage Monitor research as an increase of more than 35% seems on the high side.

"If you consider that mortgage rates were around 4.4% five years ago and you can now find rates of just 5.5%, on a £150k mortgage this is an increase of just £138 per month.

If we look at average earnings over the same period you can see that monthly pay has increased by £358 per month.

"Therefore whilst any kind of increase is unwelcome, the extent of increase is still relatively low compared to growth in earnings in the period.

Even at these levels, interest rates are still comparatively low by historical standards.

"The vast majority of households will still be able to access reasonably competitive mortgage deals and cope with the increase - notwithstanding other challenges such as increasing energy and food bills.

Whilst it is right to point out the dangers, it is wrong to scaremonger as reports such as these often do." *ONS, Annual Survey of Hours and Earning, 2007.

Average salary was £20,610 in 2002 compared to £24,908 in 2007.

This is an additional £4,298 per annum or an additional £358 per month.

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