Our estate agents in Newham always stay up to date on everything relating to the real estate and housing market. One subject that has been talked about quite frequently lately is the concept of fifty-year home loans.
Here’s what estate agents in Newham have learned about this initiative:
- The main goal of the fifty-year loan initiative is to help more people access the property ladder
- By extending the term of the mortgage, the monthly rates drop, and the average buyer will be able to borrow more. In fact, estimations show buyers could take loans of up to eight times their income instead of the current average of 3.2
- For example, with an annual income of £50,000, a first-time buyer could get a £400,000 loan. Right now, they can’t take more than £150,000.
- To follow the guidelines of the Bank of England, banks would back these long-term loans with pension funds and insurance companies instead of consumer deposits as they are currently using as backup for mortgage loans, according to our estate agents in Newham
- These long-term mortgages do have the advantage of having fixed rates and allowing those who are priced out or cash-strapped to become first-time buyers instead of being stuck as renters
- Fifty-year mortgages could be transferred to other properties and also to successors
- However, our estate agents in Newham emphasized that this type of mortgage may come with certain associated risks as well as turn out to be more costly
- The longer-term fixed rate of these fifty-year mortgages could cost the average first-time buyer more over the course of the fixed-rate period
- In addition, there are risks associated with the fact that these mortgages will still have to be paid when the borrower is in retirement and has a lower income
If you are a first-time buyer and want to buy a home or an investor looking for a new property, our Newham estate agents are always available to assist you in making the most profitable deal. Contact us today at 02070550441 or firstname.lastname@example.org.