Plus-size mortgage take-up increases 50%

Posted: 27 Feb 2007 10:27:00 GMT

The number of mortgages worth more than the price of the property they are secured against being taken out by first-time buyers has risen 50 per cent, new research has shown

The number of mortgages worth more than the price of the property they are secured against being taken out by first-time buyers has risen 50 per cent, new research has shown.

The number of new homeowners taking out 100 per cent mortgages also rose 21 per cent last year said the Mortgage Advice Bureau (MAB).

Around ten per cent of borrowers now choose to borrow mortgages worth either as much or more than the value of their home.

The popularity of the deals reflected the difficulties of raising the money now required to pay for a deposit on a property, said Brian Murphy of the MAB.

"Many in the market still view these products as the final resort for mortgage borrowing," he said.

"However, as seen through the increasing number of buyers opting for these products in 2006, these mortgages are now a very real solution for first-time buyers who stand little hope of entering the housing market without them."

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