The Times - First-time buyers miss out on lowest rates
Interest rates on home loans have plummeted in recent weeks and over the past year, potentially saving borrowers and homeowners thousands of pounds a year — but what does this mean for first-time buyers?
“First-time buyers have taken a fair hit over the last few years and we seem to be going through another tricky spell,” says Aaron Strutt, of Trinity Financial, a broker. “This is predominantly because the banks and building societies are under more pressure to make sure they lend responsibly and younger borrowers have a smaller deposit, which often makes them more risky in the lenders’ eyes.”
Most lenders have reduced the amount they will lend and pushed virtually all first-time buyers to take a full capital repayment mortgage, he adds. “Borrowers are taking much longer mortgage terms. In a bid to lower their monthly repayments, one of our clients has just taken their loan over 32 years.”
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