Tougher rules on mortgages

Tougher mortgage rules to make sure borrowers can only take out deals they can afford have been outlined by the financial services regulator. The shake-up, which comes into force in April 2014, is the result of a long-running review by the FSA.

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Homeowners 'struggling' to repay mortgages

  • Last year, a house was worth around five times the buyer's income on average, compared with 3.7 times a decade ago.
  • Shelter found last year that 42% of borrowers sometimes found it hard to make mortgage payments, with 14% struggling constantly.
  • The regulator estimated that as a result of lenders already tightening their borrowing criteria, up to 45% of borrowers who had taken out a deal since 2005 could be mortgage prisoners.
  • Roughly half of them were thought to be trapped due to their credit problems and the other half because interest-only and low-deposit deals had become more restricted.

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