New mortgage deals giving first time buyers a second chance
13/11/2007
The Chancellor’s plans to create housing more reasonably
priced is to introduce a new ten-year fixed
rate mortgage.
Stroud & Swindon stated that the Chancellor’s idea
is blemished and could charge borrowers up to £10,000 plus
over a ten-year period.
During 1997, an average ten-year deal was rearranged at 7.3%,
leaving a £150,000 mortgage costing £132,2115 over
ten years. If the borrower chooses a variable rate mortgage over
that time, they would have used up £120,340.97, a saving
of almost £12,000.
Stroud & Swindon stated that a borrower shopping around for
a fixed-rate deal during the ten-year period would have to deposit £77,903.76,
leaving a saving over £10,000. It can be much cost effective
to use a short-term deal, Stroud & Swindon explains.
Director at Stroud & Swindon, Paul Chafer commented: “Something
needs to be done in order to help first
time buyers get on the
housing ladder, the current 10-year mortgage
deals are not necessarily
the right solution. First-time
buyers are usually on a very tight
budget so any saving they can make on their mortgage repayment
would be helpful.”
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