The interest rates on offer through the Help to Buy scheme are disappointing consumers, according to a property-based social network.
The research from Property Network revealed that people are also worried about the effect Help to Buy will have on normal mortgage rates.
Key findings of the research include:
· 71 per cent of people think Help to Buy rates shouldn’t exceed 3.99 per cent in the current climate
· 71 per cent of people think normal mortgage rates shouldn’t exceed 3.99 per cent in the current climate
· 77 per cent of people think Help to Buy mortgage rates shouldn’t be higher than normal mortgage rates
· 62 per cent of people think that the Help to Buy will push up rates for all mortgages
The Help to Buy mortgage rates announced by the participating lenders are cheaper than 95 per cent mortgages, but still costly compared to normal mortgage rates. They all exceed the preferred 3.99 per cent limit as indicated by Property Network’s research.
One of Property Network’s users, Susan Watson, followed up the survey with the question, “If Help to Buy is there to help people who couldn’t afford to save for a deposit, does it make sense to tie them into long-term, high-rate mortgages? Owning a property doesn’t make their income increase. What happens if rates go up during the next 2-3 years?”
With the amount of extra costs within the Help to Buy scheme, including higher rates, mortgage set-up fees and eventual interest payments on the extra loan it may be cheaper to take out a 95 per cent mortgage, or carry on renting for that matter.
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