FTBs 'need 20% deposit to have choice on mortgages'

11-Jan-2010

First-time buyers (FTBs) may need to put down as much as 20 per cent of the value of their chosen home in a deposit if they are to have a reasonable amount of freedom when trying to secure a mortgage, according to the Times.

The newspaper warns FTBs with less than one-fifth of the purchase price available for a deposit that they should "not expect a competitive rate".

FTBs looking at the cheapest homes in a specific area may also struggle because of a "lack of choice" in that particular part of the market.

However, the publication does give one glimmer of hope to those hoping to step on to the property ladder by revealing that prices are now "more realistic" and, to those with some cash at least, homes could be more affordable.

According to the Times, FTBs should consider the merits of alternatives to a traditional mortgage - such as a shared equity mortgage and a shared mortgage - which could be easier to secure and more financially rewarding during a tough economic period.

Halifax last week revealed that FTBs earning an average wage can now afford to live in 39 per cent of the country, up from 24 per cent in 2008.

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