The survey, conducted by the online mortgage firm, also found that 380,000 people use more than 75 per cent of their monthly income to finance repayments. Across the UK, London tops the poll as the place with the highest number of people spending more than half their income on servicing loan repayments. This is closely followed by the Midlands, while the North East has the lowest number of people using 50 per cent of their income to finance mortgage repayments.
The survey also showed that the average annual cost of a mortgage has risen by £356 in the last year, fuelling speculation that the number of people using the majority of their income to pay off mortgage loans will continue to rise.
Eamonn Rice, chief executive of mform, said: “Rising property prices means that homebuyers have to take out larger mortgages coupled with higher interest rates and more charges. All of this means that more of their disposable income needs to go on paying their mortgages. However, choosing a mortgage carefully can mean that you save hundreds or thousands of pounds a year.”
Paul Hunt, head of marketing at Platform, said: “With recent increases in interest rates and subsequent potential rises in the pipeline, it will undoubtedly lead to people paying more on their mortgages and sacrificing more of their monthly income in the process. This is especially true when considering that incomes have not risen in tandem with inflation and we must also not forget that unsecured debt levels are still at their highest ever.”
