700% mortgages acceptable

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by Kay Murchie

The Council of Mortgage Lenders (CML) has spoken out about lenders offering mortgages up to 7 times a borrower’s salary.

It has defended the actions of mortgage brokers and said that it is acceptable to provide these deals.

These mortgages are intended to reduce the cost of repayments each month and the CML commented that it is doubtful whether other options available such as renting would, in fact, be cheaper.

It is the first time buyer’s responsibility for the amount of debt they undertake. Not all borrowers will take on a 700% mortgage but it is essential that they do not overstretch themselves.

Analysts have implied that a slowdown is approaching as year-on-year growth fell to approximately 12%.

Gross lending reached a new high in May of £30.6 billion, this figure was up 12% on April.