First-Time Buyers Could Delay Their First Mortgage Payment by Up to 3 Months

Buying your first home is exciting, but it can also be an expensive time. Even after saving for your deposit, there can be plenty of other costs to think about, from solicitors and surveys to furniture, decorating and moving expenses.

A mortgage option available through Skipton Building Society could give eligible first-time buyers some extra breathing space by allowing them to delay their first mortgage payment by up to three months after completion.

How does a Delayed Start mortgage work?

Skipton's Delayed Start mortgage range allows eligible borrowers to choose a mortgage where their first monthly mortgage repayment is delayed by one, two or three months, depending on the product selected.

This means that after completing on your new home, you could potentially have up to three months before your normal mortgage repayments begin.

There are both 2-year and 5-year fixed rate options available, and mortgages may be available up to 95% loan-to-value (LTV). This means some buyers could potentially purchase their first home with just a 5% deposit.

Does this mean the first three months are free?

No. This is an important distinction.

Although you don't make your normal mortgage repayments during the agreed delayed period, interest starts accruing from day one.

The accrued interest is added to the mortgage balance, which means you will ultimately pay more interest over the term of the mortgage than you would have done if repayments had started immediately.

For this reason, a Delayed Start mortgage won't necessarily be the most suitable option for everyone. If you can comfortably afford to begin making your mortgage payments straight away, another mortgage product could potentially work out cheaper overall.

Why could this help first-time buyers?

The first few months of home ownership can be particularly expensive.

As well as your deposit and the costs associated with purchasing the property, you may suddenly find yourself paying for:

• Furniture and appliances

• Decorating and home improvements

• Moving costs

• Buildings and contents insurance

• Council Tax and utility bills

• Unexpected repairs or purchases

Having one, two or three months before your first mortgage repayment could therefore provide some useful additional breathing room while you settle into your new home.

What if I only have a 5% deposit?

The Delayed Start range can potentially be available up to 95% LTV, meaning you may only need to provide a 5% deposit.

It can also potentially be used alongside some of Skipton's other mortgage options, including its Track Record Mortgage, Income Booster and Shared Ownership products.

Delayed Start mortgages can also be used when purchasing new-build properties.

Can I make overpayments?

Yes. Skipton currently allows borrowers on these mortgages to make overpayments of up to 10% of the original mortgage amount each year without incurring an Early Repayment Charge.

This includes making overpayments during the initial delayed payment period.

Is a Delayed Start mortgage right for me?

A mortgage that lets you delay your first payment could be useful if you're concerned about the amount of money you'll need immediately after buying your first home.

However, delaying your repayments increases the amount of interest you'll pay, so it's important to compare it against standard mortgage options rather than looking at the payment holiday in isolation.

At Mortgage Support Chester, we can look at your circumstances, deposit, income and monthly budget and compare mortgage options from across the market to help you understand what may be suitable.

Thinking about buying your first home?

Whether you've already found a property or you're simply trying to work out how much you could borrow and what deposit you'll need, we're here to help.

Contact Mortgage Support Chester today to speak to a mortgage adviser and find out what options could be available to you.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Mortgage products and lending criteria are subject to change and individual eligibility. The information above is based on Skipton Building Society's published Delayed Start mortgage criteria at the time of writing.