Cheap mortgages for first-time buyers – and how to work out what you can afford

MANY first-time buyers may be looking to get on the property ladder thanks to low mortgage rates, plus lockdown may mean they're able to stash away more cash then usual if they've not been furloughed.

The freedom of working from home and the prospect of being able to do so in future may also leave some thinking about fleeing expensive rents in the city for cheaper monthly mortgage payments elsewhere.

But first-time buyers may find their options limited as lenders have pulled hundreds of cheap deals for those with a small deposit in the first few months of the pandemic.

"First-time buyers and those with small deposits should not be discouraged to apply for a mortgage right now," Rachel Springall from told The Sun, "but they may find a lack of choice".

Many lenders are focusing their efforts on existing borrowers who've taken mortgage holidays due to the crisis, but Ms Springall expects deals for those with small deposits will return over the next few weeks.

She added: "It is expected that mortgage lenders will slowly go back to their usual lending practices, but it will be slow and steady."

What to watch out for

The world of mortgages can be a complicated one but shopping around for the best deal could save you thousands of pounds a year.

Mortgages with low interest rates are obviously the most appealing but lenders will only offer the best deals to the most risk averse borrowers based on affordability checks.

You'll also need to think about more than just the interest rate when looking for the right home loan - some lenders will charge a fee to take out the deal which could push up your monthly payments.

Plus, there are a range of different types of mortgage to choose from which will affect your monthly payments - from fixed-rates to variable rate deals.