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New mortgage deals giving first time buyers a second chance

13/11/2007

The Chancellor’s plans to create housing more reasonably priced is to introduce a new ten-year fixed rate mortgage.

Stroud & Swindon stated that the Chancellor’s idea is blemished and could charge borrowers up to £10,000 plus over a ten-year period.

During 1997, an average ten-year deal was rearranged at 7.3%, leaving a £150,000 mortgage costing £132,2115 over ten years. If the borrower chooses a variable rate mortgage over that time, they would have used up £120,340.97, a saving of almost £12,000.

Stroud & Swindon stated that a borrower shopping around for a fixed-rate deal during the ten-year period would have to deposit £77,903.76, leaving a saving over £10,000. It can be much cost effective to use a short-term deal, Stroud & Swindon explains.

Director at Stroud & Swindon, Paul Chafer commented: “Something needs to be done in order to help first time buyers get on the housing ladder, the current 10-year mortgage deals are not necessarily the right solution. First-time buyers are usually on a very tight budget so any saving they can make on their mortgage repayment would be helpful.”

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