First-time Buyers
Short-term fixed rates more popular than ever but first-time buyers’ debts mount
More first-time buyers and homemovers than ever before are opting for short-term fixed rate mortgages as interest rates continue to rise.
A survey from the Council of Mortgage Lenders (CML) shows that almost nine out of 10 first-time buyers and three quarters of homemovers took out short-term fixed rate mortgages in May, up 1% from April.
Bernard Clarke of the CML said: “People want certainty as interest rates are growing.”
The CML’s survey has revealed the average first-time buyer borrows a record 3.37 times their income, increasing from 3.33 times in April.
Bernard Clarke said:”House prices have been rising at a rate higher than incomes for the past 10 years or so, and many first-time buyers have borrowed more in comparison with their incomes.”
The proportion of income taken up in mortgage interest payments reached 16.6% in May, the highest level since 1992.