First-time buyers still choosing
fixed rate mortgages
New data gathered by the Council of
Mortgage Lenders have shown that first-time buyers have
a big appetite for short-term fixed rate deals. Nearly 89 per
cent of first-time buyers and 73 per cent of home movers completed
a fixed rate loan during the first quarter of 2007.
Exisitng borrowers and home buyers are still finding affordability
a major problem. This does not include the 0.25 per cent increase
July period, showing us an indication that borrowers are going
to struggle more with mortgages in the future.
CML Director General Michael Coogan commented: "For anyone wanting
to get a foot on the property ladder or move house, each month
affordability is becoming worse.
"Taking out short-term fixed-rate mortgages may provide some
reassurance, but eventually the loans will revert to a variable
rate and the risk of a payment shock is real. Planning ahead
for higher payments is as important as the initial decision to
shelter from the risk of higher borrowing costs."
CML – The Council of Mortgage
Lenders, building societies
and different lenders who between the two takeover around 98
per cent of residential mortgage lending in the United Kingdom.
Figures showed that there were 11.7 million mortgages within
the UK, alongside loans valued over a staggerring £1.1
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