First Time Buyers Advantage
Itis time to get a first time buyers advantage for contractors.
They can now get first time buyers contractor mortgages in the contractor mortgage market which suit them as much as all contractors looking for mortgages.
A survey by Halifax has revealed that buyers are £670 better off per year than those renting.
It was reported that the average monthly rent in June 2015 was £722 for a three bedroom property. This compares to a mortgage of £666 for the same size property.
Therefore the average first-time buyer’s monthly mortgage is 8% lower than the typical monthly rent.
Contractors Buying Property in London
Those buying in London could save up to a massive £81 per month this year. The average mortgage cost is £1,338 compared to the average rental cost of £1,419.
The financial benefits of buying versus renting has made quite a leap in the last 6 years.
During the credit crunch buying was 16% more than the average rental cost. This meant you would be paying out £1,154 a year more on your mortgage compared to renting.
Buying Cheaper than Renting
So why in 2015 is buying cheaper than renting?
So, there is now a first time buyers advantage because of historically low mortgage rates
Halifax reported that despite the typical price of a three bedroom house rising by 25% since 2009, mortgage rates have plummeted.
The average mortgage rate was 4.92% 6 years ago in comparison to today’s average mortgage rate of 2.91%.
Contractor Mortgage Market Rates
At the beginning of 2015 rates were at a record-breaking low. They were pushed down by the Bank of England’s base rate, which is currently hovering at 0.5%.
This resulted in a flood of competitive rates into the mortgage market. This enabled Contractor first time buyers to secure a mortgage with a small deposit and record-breaking low mortgage repayments.
Although the Greek crisis seems to be putting pressure on the Eurozone, which could also be delaying Britain first interest rate rise in 8 years, media reports reveal that the prospect of a hike are immanent as the UK’s economy strengthens.
Some high street lenders are already preparing themselves with mortgage rates slowly creeping up.
However the Governor of the Bank of England, Mark Carney, has indicated that base rate rises will be a slow process. Despite the forthcoming increase there are plenty of competitive mortgages deals to be found.
Buying Property vs Renting
Buying your first home is the biggest decision you will ever make.
Many first time buyers find the whole prospect rather daunting. The Royal Institution of Chartered Surveyors reports that just 1 in 5 young buyers find the mortgage process easy.
Therefore it is essential to seek professional financial advice and weigh up the pros and cons before committing to a property purchase:-
Saving For a Deposit
– Saving for a deposit can be a struggle but help is at hand. There are Government schemes that help you purchase your first home with as little as a 5% deposit. Help to buy ISAs will also be launching in the Autumn which will help you save your deposit.
– It’s a big commitment but once you have paid off your mortgage your home will be yours.
– Home improvements can be costly but they can increase the value of your property. So it might be worth finding a project for your first home to help you move up the ladder later.
– If your home increases in value the equity may help you purchase a bigger property or fund your retirement pot.
– Buying can be cheaper than renting.
– If interest rates rise, your repayments will go up. It’s important to prepare for any rate rises and take advantage of cheap fixed rates whilst they last.
This is why there is a first time buyers advantage now.
Specialist Contractor Mortgages
Our partners are experts in helping Contractors to find a mortgage tailored to your unique needs and they have a wealth of experience and knowledge of contractor mortgages.
They are leaders in the specialist contractor mortgages market.
They can take the hassle out of finding the right mortgage rate for you. To find out more please click on Contractor Mortgage Application and fill in the form there.