First Time Buyers Suffer Compared To Existing Mortgage Holders

With interest rates held at 0.5% again this month and mortgage rates offered by banks, small differences can mean a lot of difference when comparing rates. Recent figures show that those who can put down at least a 40% deposit on their purchase can secure a mortgage rate as low as an average 2.5% on the best deals. But first time buyers, now pressed to put down at least 10% deposit on their purchase, will find that their average top mortgage deal is around 5.34% and this rises when looking at fixed rate mortgages.

This discrepancy means that a buyer looking for a typical £125,000 mortgage and only able to place a 10% deposit paying around £194 per month, or £2,328 per year, more than their counterpart with a 40% deposit.

This variation in in contrast with mortgage deals on offer before the credit crunch started, when all buyers with at least a 10% deposit were offered the same mortgage rates.