A study by Yorkshire Bank shows that only 20% of first-time buyers would shy away from mortgages that took longer than 25 years to pay off while just 39% would rule out home loans which were 5 x their income.
Yorkshire believes first-time buyers are so desperate to get on the property ladder that they are willing to stretch their finances.
But Gary Lumby, head of retail at Yorkshire, warns that first-time buyers saddling themselves with such huge debts could mean that they will be paying off their mortgages well into their retirement.
Another cause for concern is that first-time buyers are jumping the gun by offering above asking prices to fight off other buyers instead of doing a bit of bargaining that could save them thousands of pounds.
Melanie Bien, associate director at Savills Private Finance, says: “Affordability continues to be an issue for first-time buyers so it is no surprise that they are stretching themselves any way they can to get a foot on the property ladder.
“This doesn’t necessarily mean there is a problem as long as they work out what they can realistically afford to pay and stick to it.”
She adds: “But it becomes a problem if they stretch themselves so they can’t afford their loans as this could push their finances over the edge.”