Mform.co.uk highlights first-timers' mortgage repayments struggle

07 June 2007
Over two million homeowners aged between 18 and 34 will have difficulty making mortgage repayments in the aftermath of the recent rate rises, mform.co.uk has found.

Another 0.25 per cent increase in the Bank of England base rate would push 660,000 people over the edge into struggling to meet repayments, the research showed.

The figures suggest that would-be homebuyers should think hard before taking on the financial obligation of homeownership.

Using "all or most of their savings for a deposit" or taking out a 100 per cent mortgage which stretches their future finances to the hilt, is a dangerous strategy, said Eamonn Rice, mform.co.uk chief executive.

Making sure your mortgage arrangement fits with your income and feasible repayments is vital, he stressed.

In March 2007, first-time buyers were taking out a mortgage worth 9.96 per cent more than in spring 2006 despite the fact that the same group's average income had risen by just 5.89 per cent, he warned.

Meanwhile, many first-time buyers have made moves to protect their finances from further rate rises by opting for fixed-rate products, which accounted for eight in ten mortgages sold to first-timers in March, the Mortgage Advice Bureau recently revealed.

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