First-time buyers still choosing fixed rate mortgages

10/07/2007

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 trillion.

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