first time buyer mortgage debt

w00519772

what is the average mortgage debt of a first time buyer at the point of buying their first house?

i realise it depends on age, salary, dependancies, deposit etc.

i am 32. I have saved about 40k and my salary is about 36k. I am thinking about getting a mortgage of 115k (house price of 150k). My salary has been at this level for 3 years.

i was comfortable offering 150 until i heard that a friend who earns much more than me and has more savings recently bought a house for 130k.

i am interested to hear how much mortgage debt other first time buyers are taking on and how many times this is of salary.

SG27

£105,000 joint mortgage. Combined salary was about £39k.

I have friends with mortgages nearer £200k with not a great deal bigger salaries.

Paulaviki

Me and my husband have a combined income of about £48k and have been told we can borrow up to £220k. But we are aiming to look at properties up to £190k and we have a £10k deposit so would be borrowing £180k. We don't want to overstretched ourselves in terms of the monthly repayments. We live in Kent and in our area we'll get a nice 2 bedroom house with our budget so I'm happy!

jamesd

w00519772 wrote: »

what is the average mortgage debt of a first time buyer at the point of buying their first house? ... i realise it depends on age, salary, dependancies, deposit etc.

The average amount borrowed by a first time buyer was £113,400 in May 2013.

w00519772 wrote: »

i am interested to hear ... how many times this is of salary.

It varies from about three times in Scotland to almost four times in London.

Average first time buyer income was £35,700. Average percentage of income used for mortgage payments was 19.3. 93% picked fixed rate mortgages.

w00519772

jamesd wrote: »

The average amount borrowed by a first time buyer was £113,400 in May 2013.

It varies from about three times in Scotland to almost four times in London.

Average first time buyer income was £35,700. Average percentage of income used for mortgage payments was 19.3. 93% picked fixed rate mortgages.

thanks. Is the 113400 for a single person or couple? I am a single person. Do you know the average deposit amount?

Tixy

Do you know the average deposit amount?

That is listed in the link in James' post. If you haven't read that article you may find it interesting.

jamesd

The numbers didn't specify but most mortgages involve couples. The average deposit was 20%, so with 80% being £113,400 the average deposit would be £28,350. However, note the geographic variation I mentioned, it's over £60,000 in London.

As a first time buyer a few years ago my income multiple was only a it over one and the amount borrowed was less than half those average figures. This was for a small two bedroom flat.

One of the choices for buyers is short term or long term planning. A smaller mortgage means more money is available for other things rather than being spent on interest. So someone who wants to improve their finances might choose to borrow far less than they could to improve their general financial situation, perhaps to use the saved interest to repay faster and move later. Another person might prioritise a place closer to their dream home initially and accept the long term higher cost due to the extra interest and higher bills.

w00519772

i read somewhere online today that a first time buyer bought a house for 160k in June 2012. It had an asking price of 190k. It was on the market for three months.

do buyers get discounts like this in reality. 30k seems unreal - it is almost my entire deposit.

i sampled 100 properties that sold for around 160k in lincoln in 2012 on zoopla and most sold below the asking price (5%-10% below). Do houses sell for below the asking price at this level? I guess it takes a real good negociater?

ethank

We have mortgaged 206k - 2.25 x joint earnings.

This includes 20% to HCA for HTB-EL

Lizling

Same age and salary, also single, had half the deposit you do. I took out a 25-year mortgage for about £150k (on £170k property) when I bought a year ago. Scary, but then it's easy to make the repayments as long as I'm working and if I did have to sell up and rent again, I'd be a lot (like £40k to £50k) better off than if I'd spent the last year renting.

A lot comes down to individual circumstances though - would you still be able to make the repayments if interest rates went back up to normal levels of about 5%? FWIW, I expect them to start going up in about a year, but probably not too fast.

w00519772

Lizling wrote: »

Same age and salary, also single, had half the deposit you do. I took out a 25-year mortgage for about £150k (on £170k property) when I bought a year ago. Scary, but then it's easy to make the repayments as long as I'm working and if I did have to sell up and rent again, I'd be a lot (like £40k to £50k) better off than if I'd spent the last year renting.

A lot comes down to individual circumstances though - would you still be able to make the repayments if interest rates went back up to normal levels of about 5%? FWIW, I expect them to start going up in about a year, but probably not too fast.

Thanks. That is helpful. What region do you live in? Does your house need work doing to it or is it new?