First Time Buyer Mortgages up 33% compared to last year Go compare with our comparison table

First Time Buyer Mortgages up 33% compared to last year

16 December 2013 / by Isabel Buxton
The Bank of England reported earlier this week that there were 26,800 loans to first-time buyers in October – representing a 16% increase from September 2013 alone, and up 33% compared to October 2012. Meanwhile, gross UK mortgage lending was 36% higher than the total of £12.9 billion in October last year. 
 

First time buyers seize the moment

 
First-time buyers in October 2013 borrowed an average of £119,500, and the typical income multiple was slightly lower than in September, falling from an average of 3.39 times gross income to 3.36 times gross income. In addition to this, the typical income of first time buyer households rose to £36,460, the highest level on record. First time buyers spent 19.3% of gross income to cover capital and interest payments, close to the lowest recorded monthly figure since 2005 of 19.1% recorded in April 2012 and April 2013. 
 

Mortgage experts respond

 
The news was greeted positively by those in the mortgage market. Paul Smee, director general of the CML, commented that: “It is welcome to see that first-time buyers continue lending momentum as more look to own their first home."
 
Paul Hunt, managing director of Phoebus Software said: “Crowds of first time buyers have returned creating a dramatic improvement in the market, as shown by a substantial uplift in activity. The figures show high LTV lending has doubled compared to a year ago, a sign that lenders have been proactive in their approach to lending. They have given the support to help a range of buyers, including those with small deposits, in the form of attractive mortgage deals and cheaper rates.” Hunt also remained positive about the outlook for first time buyers in 2014. “Although the Funding for Lending scheme may have been scrapped” he continued, “lending will continue to rise in 2014 thanks to the Help to Buy scheme which will be the main force in driving the market forward.” 
 
Andy Frankish, New Homes Director (MAB), agreed: “The launch of the Help to Buy mortgage guarantee in October has made waves among first time buyers and homemovers, with many brokers reporting growing interest in getting a mortgage…it is encouraging to see first-time buyers on the receiving end of the most home purchase loans in any month since November 2007.  Supporting potential buyers to take out a 95% mortgage will help the market return to a normalised state and gives consumers the opportunity to jump on the property ladder without having to scrimp and save for an unrealistic deposit.”
 
See the table below to compare our selection of first time buyer mortgages >> 
 
Your home may be repossessed if you do not keep up repayments on your mortgage.
 
First Time Buyer - Mortgage Deal Selection

Provider

Type

Initial Rate

Initial Term

Overall Cost for Comparison

Max LTV*Product Fee 
Fixed

2.39%

Reverts to 4.70%

2

Years

4.50%

90%

YesMore Info >
£750 Cashback. Early redemption charges may apply. Overall Cost for Comparison 4.50% APRC. This is the cost of the mortgage over the full term.
Fixed

2.39%

Reverts to 4.70%

2

Years

4.50%

90%

YesMore Info >
£750 Cashback. Early redemption charges may apply. Overall Cost for Comparison 4.50% APRC. This is the cost of the mortgage over the full term.
Fixed

3.09%

Reverts to 4.70%

5

Years

4.20%

90%

YesMore Info >
£750 Cashback. Early redemption charges may apply. Overall Cost for Comparison 4.20% APRC. This is the cost of the mortgage over the full term.
Fixed

3.49%

Reverts to 4.70%

5

Years

4.30%

90%

NoMore Info >
£750 Cashback. Early redemption charges may apply. Overall Cost for Comparison 4.30% APRC. This is the cost of the mortgage over the full term.

Representative Example:


A repayment mortgage of £120,000 payable over 28 years and 1 month initially on a fixed rate for 2 years at 1.99% and then on the lender current variable rate of 3.69% (variable) for the remaining 26 years and 1 month would require 24 monthly payments of £465.20 and 312 monthly payments of £565.39 and one final payment of £565.19.


The total amount payable would be £189,357.67 made up of the loan amount plus interest (£68,161.67), booking fee (£999), completion fee (£30) and valuation fee (£197).


In this example the overall cost for comparison is 3.7% APRC representative.


YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.