Natalie Banks, director of Network Mortgages, looks at why a ten year Fixed Rate Mortgage is becoming more attractive to families Buying your first home with your partner is an exciting time. It’s a big step that can mean a financial stretch, but the dual income most couples command makes them an attractive proposition to a lender.

So providing you fit within the lender’s affordability, obtaining the mortgage for your first home should be reasonably straightforward.

However a few years down the line when two has become three, four or even five, and one parent is working less or not at all or paying for childcare, your financial attractiveness may lose its allure.

In addition to this, the tough new mortgage rules mean that every aspect of your financial outgoings are put under the microscope, and everything from your morning Starbucks to your number of dependants, childcare costs and holiday spending has an impact on lenders’ assessment of the level of mortgage borrowing that you can afford.

Starting a family demands tricky financial decisions – is it better to stay at home and look after the children or earn a second income but have to surrender a large portion of that to childcare? Part-time jobs which work around school and preschool are few, and hotly contested.

The breadwinner’s income will also be effectively reduced in the lender’s eyes by the financial dependency of the stay at home parent and children. At this point some families find themselves in the trap of being unable to move or re-mortgage as they no longer fit the stringent affordability checks, which will assess their current level of borrowing as ‘unaffordable’. They are then unable to take advantage of competitive products offered by other lenders and are forced to remain with their current lender on the limited options offered.

So now could we see a swing towards couples starting out in their family home with a 10 year fixed deal? We are certainly seeing some very low rates come into the market recently.

The argument for a move in this direction is that the initial 10 year period allows time for children to grow and become more independent, childcare costs to reduce and house value to increase. This time also gives parents a breathing period and time to develop their careers.

The downside comes if you outgrow your family home and want to move on, in which case the same strict affordability rules apply when you come to port your mortgage.

In short there is no magic solution, and settling down to start a family undoubtedly creates a financial strain for many families. But as time goes on we may see the market move towards a longer term outlook when buying the first family home, a return to a more traditional way of house buying.