Mortgage costs hit seven-year high

Monthly mortgage repayments have increased to their highest level in seven years, according to new figures published today (January 7th).

The statistics, published by the Bank of England, revealed that homeowners are paying an average of £135 a month more on their mortgage than they were a year earlier.

Though they were collated before December's decision by the Bank to cut interest rates to 5.5 per cent, the figures indicate that the average mortgage interest rate grew from 5.94 per cent last September to 6.02 per cent in November.

Commenting on the figures, David Owen, an economist at Dresdner Kleinwort, told the Telegraph: "This is yet more proof that the effects of the credit crunch are starting to filter through to households. It is particularly striking that the average mortgage rate available to households rose to this level without a similar increase in the Bank of England's base rate.

"It is also fair to assume that there will have been an increasednumber of households unable to secure credit because banks have become much more unwilling to lend."

The Bank of England is due to make its latest monthly interest rate announcement later this week, on Thursday (January 10th).

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