Help to Buy mortgages are said to be more expensive than renting

Mon, 18 Nov 2013

Help to Buy mortgages are said to be more expensive than renting
First-time buyers are being advised to rent as opposed to sign up to the government’s Help to Buy mortgage scheme.

A report by PricedOut, a campaign group for affordable house pricing, states that the Help to Buy interest rates are so high that monthly rent is more economically viable. The discrepancy is most noticeable in London - £296 - but even in the north-east, the monthly rent on an average home would be £26 cheaper than a government mortgage. 

PricedOut spokesman Dan Wilson Craw said that the government has offered "a Ponzi scheme to pull the wool over our eyes and help inflate the value of their London property portfolios even further".

Monthly repayments of a Help to Buy mortgage are approximately 40 per cent higher than those for a typical 3.8 per cent mortgage with a 25 per cent deposit, according to the report. If interest rates rise, which they could if the unemployment figure falls below seven per cent, then the repayments would be higher than they currently are. 

Mr Wilson Craw said: "Continuing to rent and save appears to be the better option for most tenants."
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