According to recent research, first time buyers could save around £2,000 a year on their mortgage payments while facing much greater choice of competitive mortgage rates.
During the last couple of years, people buying their first home had limited choice of mortgage products, especially if they had a high loan-to-value ratio. The better deals were reserved for those who had larger deposits available. Moneyfacts.co.uk has produced data that indicates that the range of products available for first time buyers has increased from 42 in August 2013 to 195 in 2015. The interest rates on fixed rate mortgages have also fallen slightly, meaning that buyers can also save money. Based on borrowing £140,000 over 25 years, in August 2013 the best deal would have cost £10,407.12 for the first year. Borrowing the same amount over 25 years at the lowest rates available in 2015 would be £8,401.44 for the first year, saving £2,005.58.
According to finance expert Charlotte Nelson, the Help to Buy Mortgage Guarantee Scheme may have acted as competition for some of the higher rate products around, encouraging lenders to reduce rates for high loan to value mortgages. Due to the favourable terms outside the Help to Buy scheme, Nelson advises first time buyers to compare products carefully.
Mortgage advisers are happy to provide advice for buyers who are looking for the best deal to suit their individual circumstances. As mortgage advisers study on a CeMAP course, they have all the relevant information available to help.