§ Mr. AllenTo ask the Chancellor of the Exchequer if he will list in tabular form, and at constant prices, the amounts which would be payable each month(a) at current interest rates and (b) at the lowest interest rate achieved since June 1987, on a standard repayment mortgage repayable over 25 years of each of the regional average mortgages listed in his answer of 19 February, Official Report, column 518.
§ Mr. LilleyThe monthly interest payments for average new mortgages in each year, after deduction of basic rate tax relief, are given in the table. They are based on the current 14.5 per cent. mortgage interest rate and on the 9.8 per cent. rate which existed in June 1988.
Monthly payment1 Region Average new mortgage £ 9.8 per cent. interest rate £ 14.5 per cent. interest rate £ Northern 28,400 173.95 257.38 Yorkshire and Humberside 29,600 181.30 268.25 East Midlands 34,700 222.13 328.67 East Anglia 44,600 302.98 448.29 Greater London 60,900 436.10 645.25 South East 53,200 373.22 552.21 South West 43,700 295.63 437.42 West Midlands 33,800 214.78 317.79 North West 31,300 194.37 287.58 Wales 30,200 185.38 274.29 Scotland 26,500 162.31 240.16 Northern Ireland 24,200 148.23 219.31 United Kingdom 38,300 251.53 372.17 1 Assuming endowment mortgage.
§ Mr. Nicholas BrownTo ask the Chancellor of the Exchequer what has been the total loss or gain to the average mortgagor claiming mortgage interest relief resulting from changes since the 1988 Budget in(a) direct taxation, (b) increases in the rate of interest on mortgages and (c) interest payments net of mortgage tax relief.
§ Mr. Lilley[holding answer 9 February 1990]: The average outstanding mortgage in 1987–88 was £17,000. The table compares the income tax and NIC payments and mortgage interest payments on a mortgage of £17,000 for a married man with a gross income of £18,000, the average for a mortgagor in 1989–90, under (i) the tax and NIC rates 13W and allowances and the mortgage interest rate of 1987–88 with allowances indexed to 1989–90 levels and (ii) the rates, allowances etc. actually in force in 1989–90. The comparison ignores any repayment of capital there may have been between 1987–88 and 1989–90.
£ per year 11987–88 1989–90 Change Income tax and NIC2 5,246 4,771 -475 Mortgage interest payment net of tax relief 1,378 1,772 + 394 1 After indexation. 2 Before relief due under MIRAS and assuming that the income is all earned and that the wife has no earnings, that no allowances or reliefs are available other than the married man's allowance, that the man is contracted into SERPS, and that the post-October 1989 NIC rates and limits apply for 1989–90. Note Assuming average mortgage interest rates of 11.1 per cent. for 1987–88 and 13.9 per cent. for 1989–90.