First-time buyers 'must be able to cover mortgage interest rate rises'

Posted: 16 Mar 2010 10:40:27 GMT

First-time buyers must ensure that they have the necessary funds available to cover any potential rise in mortgage interest rates, it has been suggested.

Helen Adams, managing director of FirstRungNow.com, says that it is imperative that they take into account that the discount period typically offered at the start of a mortgage deal will eventually come to an end, meaning that higher payments will then be required.

Ms Adams' comments come in response to new figures from Callcredit, which show that one in four 35-44 year olds say that an income drop of £300 would cause them to default on their mortgage payments.

Additionally, one in eight people who fall into this age bracket admit to over-inflating their income when applying for home loan products in the hope of securing a higher credit limit.

Statistics from the Council of Mortgage Lenders reveal that gross mortgage lending in the UK declined to an estimated £9.1 billion in January, marking a 21 per cent year-on-year fall.

© Houseladder Ltd