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First time buyer mortgage rates falling

First time buyer mortgage rates falling

Category: Mortgages

Updated: 12/08/2010
First Published: 12/08/2010

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

A fall in the cost of first time buyer mortgages has led to a rise in the number of people securing their first step on the property ladder, according to Moneyfacts.co.uk.

The research showing improved first time buyer mortgage affordability comes shortly after the Council of Mortgage Lenders revealed first time buyer mortgage approvals had increased by 20% during June.

According to Moneyfacts.co.uk, for borrowers with a 10% deposit, the average rate on a two year fixed rate first time buyer mortgage is now 6.15%, compared with 6.48% six months earlier.

For those first time buyers lucky enough to have a deposit of 25%, the average two year fixed rate has dropped to 4.11%, down from 4.37%.

However, with first time buyers having to raise an average deposit of £44,030 to secure their first home, Louise Holmes, spokesperson for Moneyfacts.co.uk, said considerable barriers to them fulfilling their home ownership dream still remain.

"Potential borrowers dreaming of owning their first home will have been pleased with recent reports suggesting a fall in house prices," she added.

"Mortgage lenders, however, see house prices continuingly falling as a threat and usually review their credit criteria by increasing deposit requirements.

"The fact remains that lenders will always offer a better rate to borrowers with a bigger deposit."

If you're attempting to take your first step on to the property ladder, make sure you keep an eye on our first time buyer mortgage best buy chart for all the latest deals.

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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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