First-time buyer mortgage rates up 0.75% in one year

13 November 2008

Mortgage rates for first-time buyers are up 0.75% compared with last year, despite cuts in the base rate, according to a new survey.

The survey, by mortgage broker mform.co.uk, showed that the most competitive two-year fixed-rate mortgage deals for those with a 10% deposit have gone up from 5.69% in November 2007 to 6.44% this month.

There had been some hope that the cost of fixed-rate mortgages would come down after the recent 1.5% base rate cut, but so far the rates appear to be largely unchanged.

A Think Money mortgage expert said: “Although most lenders have responded well to the base rate cut with regard to variable-rate mortgages, fixed-rate mortgages have yet to experience the same kind of cuts. This continues to prevent many would-be first-time buyers from climbing on the housing ladder.

“That said, it is still possible for first-time buyers to get a mortgage, and it may well become easier in the not-too-distant future. In the meantime, speaking to a good mortgage adviser can improve buyers’ chances of getting the best mortgage deals.”

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