2005 first time buyers 'to be hit hard'

05-Jun-2007

First time buyers who capitalised on interest rate cuts in 2005 to take out a two year fixed-rate mortgage could soon face a huge rise in repayment rates, it has been advised.

With 80 per cent of new mortgages taken out in March being fixed-rate products, first time buyers are increasingly trying to keep their repayments constant, yet as many as 179,000 who did likewise two years ago will face a collective £33 million monthly increase when the deals run out, the Mortgage Advice Bueau (MAB) has advised.

Repayments could rise by as much as 25 per cent, the MAB suggests.

"The effects of four successive base rate rises will become really apparent to those whose fixed rate loans come to an end over the next few weeks. Their mortgage repayments will no longer follow the low fixed rates set in 2005 but instead revert to their lenders escalating SVR rate," MAB head of lending Brian Murphy advised.

To find out about those mortgages specifically aimed at first time buyers, see our best buys for first time buyers table.

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