First time buyers benefit from 100 per cent mortgages

09-Aug-2006

First time buyers who have spent two years saving for a deposit on a house could end up paying more in the long-term than those first time buyers who opt for a 100 per cent mortgage, according to Purely Mortgages.

Although 100 per cent mortgages carry some risk, first time buyers who take one on will face an outstanding loan amount of £135,797, while those with a deposit face a higher outstanding loan amount of £149,122.

Mark Chilton, chief executive of Purely Mortgages, said: "First-time buyers keen to own their own property straight away, thereby avoiding the couple of years of saving up their money, can now be more confident when looking at a 100 per cent mortgage as one of their options."

He went on to say that first time buyers who have saved towards a deposit may benefit from more choice and better rates, but for those who find saving up to £329 a month overwhelming, a 100 per cent mortgage option is "certainly a worthwhile consideration".

Meanwhile, research from the Council of Mortgage Lenders has revealed that first time buyers are paying an average of 3.1 times their income to get a mortgage, yet despite higher income multiples first time buyer numbers remain strong.

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