First-time buyers struggling to save a deposit and worried about budgeting for their mortgage repayments in the face of rising interest rates were offered some consolation today.

According to research from price comparison service MoneyExpert.com, the number of fixed rate mortgages that will lend the entire value of a property more than doubled in May this year from the same month in 2006, boosting the number of deals from 60 to 127.

Further good news for first-timers is that, despite a 1% rise in interest rates over the past year, 100% mortgages have lagged behind in price. The typical initial rate now payable on a mortgage for someone without a deposit is 6.49%, compared with 5.89% a year ago. The improved value of this type of mortgage is a result of stiffer competition among lenders, and will continue to attract the "maiden homebuyer", said MoneyExpert.com. However, borrowers requiring a loan for the full value of a property, while also wanting to protect their monthly mortgage repayments, will still have to pay for the privilege.

"It will cost borrowers aroundd 1% more in interest to take a 100% loan compared to a 90% loan," said Ray Boulger, senior technical director at broker John Charcol. "And the difference in price between the best tracker and the best fixed rate deal is currently around 0.5%."

However, this does not mean 100% fixed rate mortgages should be avoided. "The first question first-timers should ask themselves is ´Can I afford it?´," said Mr Boulger. "In many ways it is more worrying to have a 50% loan-to-value that you can´t afford than a 100% loan-to-value that you can." If you can comfortably afford the repayments, first-timers must then choose whether to hold off and save for a deposit or borrow 100% of the property value. But this is dependent on what happens to house prices.

"If it is your view that they will increase even by 5% per annum, you would be better off buying now and paying the premium on this type of mortgage," said Mr Boulger. "If you think they will stagnate it could be better to save, but it all depends on your circumstances. Some people are paying out so much in rent that saving becomes very difficult." Mr Boulger said he expected property price rises to tail off in the second part of this year.

Rob Clifford managing director of broker, Mortgageforce, said the increased choice of 100% fixed rates was welcome, as the vast majority of borrowers who require a 100% deal require a fixed rate too.

"It goes hand-in-hand as budgeting is also important for first-time buyers," he said. However, he added that the increased numbers reported by MoneyExpert.com were still small when put in context of the 30,000 variants of mortgage that are on the market at any one time.

Some lenders will also lend up to five times salary to struggling first-timers, but unless you are in a professional job or have a guarantor for the loan this won´t apply to borrowing 100% of the property value.

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