First time buyers 'increasingly' opt for 100%-plus borrowing

27-Feb-2007

Britain's first time buyers are increasingly taking out mortgages with a loan-to-value (LTV) greater than 100 per cent, research suggests.

According to data released by the Mortgage Advice Bureau (MAB), the number of first time buyers borrowing with a LTV in excess of 100 per cent increased by 50 per cent in 2006.

Additionally, in 2006 the uptake of 100 per cent mortgages rose by 21 per cent.

"In attempts to make the transition on to the property ladder as easy as possible for these buyers - the option to borrow more than the value of their home is proving very popular," said Brian Murphy, lending manager at MAB.

"[However,] many in the market still view these products as the final resort for mortgage borrowing," he added.

According to the Guardian, research suggests that some first time buyers are opting for 100 per cent or higher mortgages to free savings for the purchase of other items, such as new home furnishings.

To find out about the different ways of financing a first home, see our section ‘Affording Your First Home’.

MAB is an independent mortgage broker with offices nationwide.

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