Short-term mortgage deals on the rise

Posted: 02 Dec 2009 11:42:45 GMT

The number of short-term mortgage deals on the market has risen in the last year, according to new figures.

Lenders have increased the number of two-year home loans available to home purchasers from 257 in 2008 to 410 this year, the statistics from Moneyfacts state.

Helen Adams, managing director of firstrungnow, says that while short-term mortgages can help first-time buyers to get a foot on the property ladder, it is often the case that people are unaware of the costs of these deals.

She advises that people who are buying their first home should work with mortgage advisors who will be able to explain the situation to them.

Ms Adams notes that deals in which repayments are lower at the start of the term can sometimes help homeowners in the first couple of years. However, buyers need to be aware that these costs will go up as the lending period goes on.

According to figures from the Council of Mortgage Lenders, gross lending for October was an estimated £13.5 million. This figure is down 27 per cent from the same month in 2008.

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