The Times reported this weekend on the competitive spirit within the mortgage market, and the positive effect this is having for borrowers. Lenders have now turned their attention to criteria, adopting more flexibility when it comes to affordability, the self-employed and older borrowers. First-Time Buyers could also benefit, with the recent launch of a new scheme which provides another option for the Bank of Mum and Dad to help their children onto the property ladder without handing over their savings.
The Mail on Sunday also highlighted a growing trend in the market, reporting on recent figures from the Council of Mortgage Lenders which reveal that 60% of First-Time Buyers now take a mortgage for longer than the traditional 25-year term. The numbers have doubled over the last 10 years, with experts pinpointing rising house prices and tightening of affordability rules as reasons for the increase. They also highlighted, however, the need for borrowers to be aware of the additional cost in interest of taking a mortgage over a longer period of time.
Ensuring that a mortgage is affordable right from the start is clearly important but, as reported in the Sunday Times, more than 2 million homeowners have never experienced an increase in the Bank of England Base Rate. Concerns have therefore been raised over whether borrowers are prepared for increasing mortgage payments in the future. One way to combat this is by overpaying while rates are at record lows, thereby paying down the debt at a faster rate.
To see how much you could save by overpaying on your mortgage, have a look at our calculator.
What the papers said about mortgage terms and overpayments