Although traditionally the fixed mortgage was seen as the better deal, many first time buyers are finding that their only option right now is a flexible mortgage. Interest rates are rising and fees for flexible mortgages are going up, but often, banks will only offer this type of a loan to a new buyer. This could however work in their favor if the rates on flexible mortgages go down in a few months. However, this is a gamble that many first time buyers are not willing to take. Until the market changes however, these buyers may have little choice if they want to get a home.”Month on month we see affordability constraints for first-time buyers worsening,” said CML director general Michael Coogan. “And with the impact of May’s interest rate rise still to be felt, many borrowers face higher costs in the coming months. The vast majority of borrowers will be able to absorb higher mortgage payments. But with two million fixed-rate loans coming to an end over the next year and a half, many borrowers should anticipate that their mortgage costs are likely to rise and should be planning ahead.”
Related reading: Flexible Mortgages
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