22 Jul 2016


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Buying your first home is one of life’s most significant financial achievements and many first time buyers are struggling to save a deposit in today’s market. This is largely as a result of rising house prices and, in many cases; they are paying out for rent at the same time.

Falling mortgage rates in recent months has resulted in the average mortgage interest payments made by first time buyers over two years has fallen. The average payment is down from £11,237 in the first three months of 2015 to £10,019 in the first quarter of 2016, a saving of £1,308.*

This means that would be first time buyers are now able to spend more of their cash on paying back the equity in their new home and reducing their mortgage faster in addition to lowering the total interest they will pay over the period of their mortgage.

Not only have interest rates fallen, but there are now more mortgage deals available for those with smaller deposits meaning that first time buyers could be enjoying one of the most favourable borrowing environments they’ve ever seen.

What has led to this increase?

Since the introduction of the Help to Buy Mortgage Guarantee Scheme, the number of products available at 95% LTV has rocketed.

This initiative is due to end this year, but it certainly seems to have revitalised what has generally been considered an inadequately served area of the mortgage market. The range now available to borrowers is vast, and this is set to continue with or without Help to Buy.

                        More Lenders + More Deals = Greater Competition which can only mean welcome news for FTBs!

Passing affordability checks

Obviously potential borrowers will still be required to demonstrate that a mortgage is affordable, and pass the necessary credit checks. However it’s worth mentioning that a recent IMLA survey reported that “More mortgage borrowers are seeing their applications for mortgage loans given the green light as new products emerge to support ‘non-standard’ circumstances” and “Both lenders and brokers view first-time buyers as the market area with the best growth prospects” which is encouraging news for anyone considering taking their first step onto the property ladder.

Buying your first home can seem like a daunting process. Our friendly Mortgage and Protection Consultants at The Mortgage and Insurance Bureau can help you work out how much you can borrow and recommend the right mortgage for you. Call them today on 01895 622700.

* Source AMTrust International, Mortgage and Special Risks.

Your home may be repossessed if you do not keep up repayments on your mortgage. The typical arrangement fee is £195.00, however the actual fee you pay will be dependent upon your circumstances.

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