CCR Magazine

CCRi banner ad
You are here  :Home arrow News arrow How much is your mortgage really worth?
Contact Us Newsletter Signup RSS Feeds

Latest News Headlines

Headlines

 
Commercial Credit News

Headlines

 
How much is your mortgage really worth? PDF Print E-mail
Thursday, 05 November 2015

Historically, inflation has made fixed-term mortgages seem like a sure bet. Inflation tends to reduce the value of mortgage debt, while wages and salaries tend to rise to match it, making mortgage repayments feel that little bit easier. While interest rates will rise over time in response - making things cost that little bit more - what people ‘feel’ the money in their pocket is worth softens the effect of inflation.  That means higher salaries balance out higher interest rates which tend, at least initially, to lag behind inflation.  



However, negative inflation produces the opposite effects. Headline interest rates - the rate quoted in loan and deposit agreements - fall to make borrowing more attractive, but the value of debt no longer sees that ‘chipping away’ effect. To make things worse, in a deflationary world wages and salaries are more likely to stagnate or fall rather than rise.

For those with a mortgage, deflation can mean a long hard struggle to pay off their debts from wages and salaries that face going down rather than up.

James Jones, Head of Consumer Affairs at Experian, commented: “For those taking out a mortgage, it is important that people work out what they can afford, and plan ahead for unforeseen costs that may make repaying debts harder over the years ahead, future-proofing their finances and ensuring they come out the other end with their credit rating intact.

“We’ve created a simple guide to help people considering a mortgage which should help people get the deal that they want, and the loan they can afford.”

A survey of people who had failed to secure a mortgage last year suggests that many are failing to do the basic research needed to get proper control of their finances:

• 13% did not know how much money they have left over at the end of the month;
• 18% did not know what monthly repayments they could afford;
• 14% did not have a big enough deposit for the property they wanted;
• 12% were unable to secure the size of mortgage they needed.
 
CCRI
3 October - Guoman Tower Hotel, Central London 

CCRInteractive, in association with Marston Holdings , is the largest and leading one-day conference from the publishers of CCRMagazine – a truly national and international event for the credit industry.

This landmark event allows delegates to: Learn best practice of how to increase profitable sales in today’s economy. Understand the key compliance issues and how they will impact upon you. Discuss the legislative and regulatory framework and how it will effect you. Consider the potential effects of Brexit on your business. Discover the latest innovations in the market to improve your collections. Motivate your staff to achieve ever improved results.

To book to attend in 2017, contact Stephen Kiely  or Alison Lucas. To find out more about being part of this landmark event, please contact Gary Lucas
CCRI 

 Forums International Ltd

Forums International Ltd

 Attendance at your first meeting is free of charge, and please quote reference 'CCR2016' to receive the special 10% discount off of your first annual subscription.

Find out more here.

latest issue

CCR Cover

The latest edition of CCR Magazine, the leading editorial publication in the UK credit industry, is out.

Read the latest issue online

The Credit Excellence Awards

Awards 

Tuesday 3 October - Guoman Tower Hotel, Central London


Do not miss your chance to meet and network with the Winners and Finalists at the Credit Excellence Awards, in association with Hoist Finance.


To book your place to attend, please contact Alison Lucas.


subscriptions

CCR is the premier magazine for consumer and credit professionals. It provides an independent voice to the industry, breaking major news stories and running in-depth features.

As a magazine, it works with and campaigns on behalf of the credit industry to promote its importance as a centre of potential profit and business development to the wider business world.

Subscribe to CCR Magazine

CCR World Magazine


 

Providing information and analysis for thousands of senior credit professionals worldwide, every quarter.

Find out more

GTS Media Ltd
81 Cambridge Road
Southend-on-Sea
Essex
SS1 1EP

Registered in England No: 05483197