Discount rate mortgages ease buyers' woes

Britons consistently underestimate how much it will cost them to buy a home, but a discount rate mortgage can help ease the sting of the first year in a new property.

Some 44 per cent of buyers forget to factor in legal fees, stamp duty and property surveys when they work out how much money they have to spend on a new home, figures from Yorkshire Bank Mortgages reveal.

And just one person in 12 remembers to put money aside for the cost of moving house.

"It is too easy to quickly move on to thoughts of redecorating and building a new conservatory as soon as the offer is accepted, failing to factor in all the costs of a new home," Gary Lumby, head of retail at Yorkshire Bank.

"Overlooking costs such as surveys and stamp duty is asking for trouble when, as our survey suggests, there are likely to be less predictable expenses as well."

The bills do not stop once you are moved in either - one homeowner in three has to replace or repair a broken cooker in their new property with one in eight facing bigger bills when their boilers blow.

And to try and make your life easier in the first year in a new home, Britons can take out discount-rate mortgages that will keep interest rates low for the first two years.

"[Discount rate mortgages] may not help you predict when the power shower is about to give up, but by keeping your monthly mortgage payments low for a year or two, you may feel more confident that you can afford to replace it with an even better one," Mr Lumby said.