First-time buyers are spending on average £120 more per month than this time last year due to higher house prices and interest rate increases, a report from Nationwide has shown.
Those first-time buyers who have not been on a fixed-rate mortgage over the last 12 months have lost £170 to date, the research finds.
At current rates, signing onto a fixed deal could save a borrower £50 per month, the lender suggests.
Meanwhile, "three interest rate rises in six months add considerably more to the borrowing costs for this already struggling group", Fionnuala Earley, chief economist at Nationwide, observed.
To meet the challenge, many first-time buyers are saddling themselves with longer-term loans, Ms Earley added – noting that the total amount repayable on an average property over the life of the loan would be more than £25,000 higher on a 30-year mortgage than on a 25-year arrangement.
The figures comes as Council of Mortgage Lenders figures show that 59 per cent of first-time buyers are now hit by stamp duty, payable on properties worth £125,000 or more.For more information on first-time buyer mortgages, click here.
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