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• MPA Online

More than a quarter of people looking to buy their first home in the next two years would give up on that dream if interest rates were to rise by just two percentage points in the next two years, according to results from the 2010 Mortgage Choice First Homebuyers Survey.

“Although a large portion of first time buyers-to-be are prepared for interest rate rises and appear to be quite knowledgeable about the market, a significant proportion – 28% – say they’ll back out of buying if rates increase by up to two percentage points,” senior corporate affairs manager, Kristy Sheppard said. “Savvy mortgage holders give themselves at least that as a repayment buffer each month so these buyers should think very carefully about entering the market.”

This year’s annual survey showed that 32% of respondents plan on buying their first property on their own, compared to 28% in last year’s survey. This has been cited as a possible reason that small rate rises could have a big impact on the willingness of buyers to take the plunge. However, 78% were planning to make lifestyle sacrifices in order to purchase – up from 71% in 2009.

Other key findings

• Brokers are the most popular first point of contact for mortgage advice at 24%, then parents (22%)
• 65% will purchase their first property with a partner, friend or family member/s in a co-ownership agreement, compared to 71% in 2009
• 52% will purchase an established home, compared to 71% in 2009
• 51% have ‘some idea’ about the purchase process - only 12% said they were well informed
• 53% said their largest concern was the time it takes to pay off the loan and own outright
• The most popular predicted mortgage size range for these first time buyers is between $300,001 and $400,000, as indicated by 33% of respondents
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