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First-time buyers best prepared for unexpected with mortgages

27 May 2005
When it comes to preparing for the unexpected with their mortgages, first-time buyers are streaks ahead of other mortgage holders, the Council of Mortgage Lenders (CML) has revealed.

According to research by the CML, three-quarters of all recent first-time buyers have some form of insurance to cover their mortgage payments in the event of illness or unemployment, compared with less than two-thirds of other borrowers.

Just under a third (31 per cent) of first-timers have both health and unemployment provision, compared with just over one quarter (26 per cent) of mainstream mortgage holders.

However, the CML's research also suggested that recent first-time buyers were less likely than others to have comprehensive cover for all adults in the household.

Forty-eight per cent of first-timers only have cover for one person out of two or more adults, the CML found, compared with just over a quarter (27 per cent) of borrowers as a whole.

"The world is an inherently risky place. No-one will ever remove all the risks associated with purchasing a home using a mortgage," said Alex Solomon, senior policy adviser at the CML.

"However, problems faced by mortgage customers can be minimised by a combination of improved understanding of the risks associated with home-ownership and the availability of a co-ordinated and comprehensive safety net."

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