Mortgage payments drops, says Bank of England Homeowners paid off £5.8 billion of mortgage debt in the first quarter of 2011 – a drop from the last quarter of 2010 when £7.1 billion was paid off, according to the Bank of England.

This is the smallest amount of equity paid off in a year, the Bank says, compared to the end of 2010 when the figure was the highest since records began in 1970.In the past many people had been taking equity out of their home, which was one of the main reasons behind increased debt and spending before the recession.But the number of people repaying their mortgage has slowed, which could be a symptom of the financial pressures Brits are under, with high inflation, VAT and energy bills putting a strain on household budgets.Howard Archer, Chief Economist of IHS Global Insight, said: “Extremely low savings interest rates have made it much more attractive for many people to use any spare funds that they have to reduce their mortgages.”In particular, many people may be using the extra money that is resulting from their very low mortgage interest payments to reduce the balance that they still owe on their houses.”Last week the Bank of England predicted that the number of mortgage defaults – which has already reached its highest level since 2009 – will continue to rise over the next few months.

Similar Posts:

• Top Wholesale Mortgage Lenders Q3 2010
• Mortgage Brokers Grab More Market Share in Third Quarter
• $9 Trillion in Home Equity Lost Since Real Estate Market Peak
• 5 Effective and smart steps to debt freedom
• Bank Equity Home Loan For a Mortgage – 3 Options to Consider