The council of mortgage lenders (CML) has defended mortgage loans with large repayments . The director general of the CML said that mortgages set at five or even seven times borrower salary are an essential part of the market.
Taking an opposite view, housing expert professor Steve Wilcox reportedly commented: "We are now in a low inflation environment, which means when you go into a high mortgage in year one of your mortgage career, it remains a high proportion of your earned income for much longer than used to be the case when earnings were going up at 10 per cent a year rather than four per cent or five per cent a year. Over your mortgage career as a homeowner people are far more strapped now than they were in the past."
Michael Coogan said that high repayment mortgages for lower salary borrowers were pitched to bring mortgages more affordable. Coogan reportedly commented: "Those are measures designed to try and bring down the cost per month, and if you look at it in the context of what are the housing choices of first time buyers - are they able to get housing rental at a cheap rate ? Is the mortgage actually going to be cheaper for them than other housing options in other circumstances?"
Coogan reportedly concluded: "Not everyone will get a five, six or seven [times] income multiple, and it is important that the customers don't over-extend themselves. It is for the borrowers also to take reasoned view of their prospects."
CML come to aid of big mortgages
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