Despite mortgage rates dropping through the year, research from Mortgage Advice Bureau found that 29% of first-time buyers cite mortgage rates as being one of the biggest blockers to buying. 

After a summer of optimism fuelled by declining mortgage rates, autumn has seen a slight uptick. Markets have started to predict a period of higher for longer interest rates, and lenders in turn have repriced upwards. This could have an impact on the number of first-time buyers choosing to purchase. 

It isn’t just rates that are putting buyers off, a quarter (24%) of first-time buyers are worried that mortgage rates won’t drop quickly enough in the coming years for them to be able to afford to buy. 

The average mortgage rate for a 5 year fixed mortgage is currently 5.09%, a little down from the average of 5.18% in March this year. However, in general, some lenders have moved rates higher as we approach the end of the year due to higher borrowing costs. 

A third (31%) of first-time buyers are also worried about keeping up with repayments and the general affordability of the loan. 

Danny Belton, Head of Lending at Mortgage Advice Bureau says that there are challenges facing first time buyers, but there are also still opportunities to be had. 

“Rates have risen since the summer as shifts in the global economic environment have driven up borrowing costs for lenders. And it is understandable that higher mortgage rates cause concern for first-time buyers but they shouldn’t put off their homebuying dreams.  Deals are still available and innovations like rental recognition products and a growing market for higher loan-to-value mortgages are helping first-time buyers to get onto the property ladder.

“For those planning to buy next year, starting early is key. Locking in a rate now doesn’t mean missing out—if a better deal emerges when you make an offer, you can switch.”