First-time buyers who have just taken out a loan will experience repayments far lower than those in their position three years ago.

The latest study into the cost of paying off a loan by Halifax noted that in June 2010 the average buyer was paying back 28 per cent of their disposable income on their mortgage, a sum substantially lower than the 50 per cent recorded in June 2007.

This amount is also far less than the earnings to payment ratio recorded in the past 25 years, where 35 per cent was noted as the average.

"It's important that first-time buyers understand that whilst there are still challenges in raising deposits, other market conditions are more positive," said Stephen Noakes, commercial director for mortgages with the institution.

This comment backs up those recently made by Ray Boulger from John Charcol, who noted that it was raising a deposit that was proving to be the stumbling block for many would-be buyers.

Written by Paul Governor

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