Buying Could Save East Mids First Time Buyers Cash In The Long Run

20 June 2018, 07:44 | Updated: 20 June 2018, 08:07

Sold sign outside a house

First time buyers in the East Midlands could be £500 better off a year if they stopped renting and got on the housing ladder.

A study from Santander Mortgages weighed up the potential cost of home-owners' monthly mortgage payments against what they could expect to pay out by renting and found that, across the UK, there were potential savings to be made by being on the property ladder.

It discovered that the average first-time buyer deposit needed here is £32,816 - compared to £51,9052 nationwide - but once on the property ladder, first-time buyers could expect their monthly mortgage repayments to come to £577 on average

This means home-owners could save an average of £45 a month - or £540 a year - compared with renters, it said.

The research, which used average rents from the Homelet index and Office for National Statistics (ONS) house price figures, made several assumptions about a first-time buyer's mortgage payments, including that they would have a 24% deposit, a mortgage rate of 2.48% and be paying off what they owe over 25 years.

Miguel Sard, managing director of mortgages at Santander UK, said: "Of course, buying a property is a major financial investment with up-front costs to consider, but long-term the financial benefits can be significant.

"Getting independent advice and looking for competitive rates, is crucial to get the right mortgage to meet potential home-owners individual needs."