Average first time buyer loan almost double in four years

The average first time buyer now has a mortgage of £130,000, almost twice the amount the average first time buyer loan was four years ago in 2003, when it was nearer £75,000, according to figures from Abbey Mortgages.

Not only that, but first time buyers are borrowing more money than ever. 53 per cent have a mortgage of more than £150,000 compared to just 16 per cent four years ago – that’s a whopping 231 per cent increase. The research also shows an increase in the number of people borrowing more than 75 per cent loan to value – up by 13 per cent to almost 80 per cent in 2007, versus only 67 per cent in 2003.

Nici Audhlam Gardiner, Head of Mortgages at Abbey, commented: “We are fully aware of the difficulties first time buyers have in getting onto the property ladder. Our research shows that they have to borrow more and more to get even a small foot on the ladder. Abbey is absolutely committed to the first time buyer market and continues to develop new mortgages to give these customers the help they need.”

Help is at hand

Abbey has a range of mortgages that can help first time buyers save upfront costs and lower their monthly payments. This includes mortgages with no deposit required – our 2-year fixed 100 per cent LTV product is currently available at 6.65% through a broker. In addition, we have deals that offer five per cent money back, which can then help towards covering additional costs such as stamp duty. And also mortgages where customers can defer part of the amount they borrow until the end of the mortgage, or even extend the length of their mortgage term.

Abbey can also help customers afford more by offering them a loan of up to five times their income. Only borrowers with good credit ratings and low debt levels would qualify for these higher multiple loans.