31 May

First-time buyers underestimate mortgage costs

First-time buyers underestimate mortgage costs

Many first-time buyers in the UK are underestimating how much it will cost to repay their mortgage, according to a new study.

Research by conveyancing services provider My Home Move revealed those stepping on to the property ladder expect to spend between £100,000 and £150,000 on their first property, but they are less clear on how much they will need for the repayment of the home loan.

Figures suggest a property costing £100,000 will require a monthly mortgage repayment of £450 - which is 28 per cent higher than first-time buyers expect. In many cases, potential homeowners believe their mortgage commitment will be similar to rental prices, but this is often not an accurate indicator.

"The majority of aspiring first-time buyers, 88 per cent, are currently in rented accommodation, and as such their prime comparison for a mortgage payment is the amount they pay in rent each month," explained My Home Move’s spokesman Doug Crawford.

He added: "According to industry figures the average rent outside of London and the South East hovers around £600 a month, suggesting that most aspiring first-time buyers want a like for like swap in monthly outgoings, or even a saving."

Those wanting to step onto the property ladder are being encouraged to fully research any purchases and ensure they are in a good financial position.  

Last month, the average UK property price was £313,655, exceeding the previous high of £310,471 set in June 2016.ADNFCR-1222-ID-801836384-ADNFCR

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