First-Time Buyer Mortgage Options.
Figures from unbiased.co.uk show that searches for first-time mortgage advice accounted for 41% of all enquiries in the sector during August making them the single largest contributor to activity in the mortgage market.
The Council of Mortgage Lenders also released figures this month (September) which noted a sizeable 10% increase in mortgage lending since August 2010 – the highest it’s been since July 2009.
First-time buyers looking to secure a mortgage will be pleased to hear that some lenders have cut rates on their first-time buyer mortgages. Abbey for Intermediaries recently announced a series of cuts to its mortgages aimed specifically at first-time buyers.
The 4 Year Deal
85% loan to value
Cut by 1.1% to 4.29%
?495 fee
The 5 Year Deal
90% loan to value
Cut by 0.24% to 5.75%
?495 fee
Saffron Building Society are also offering lower fixed rate deals for first-time buyers who only have small deposits but can demonstrate a good record for paying rent. The buyers rental payment history, which must be a minimum of 12 months, is then used to calculate the amount they will be able to afford each month in mortgage payments.
First-time Buyer Mortgage
95% loan to value
Cut by 6.49% to 5.79%
?195 fee
Other options for first-time buyers
HSBC currently have a two year fixed deal at 2.79%, which is much lower than the above rates even after cuts. However you will have to pay a much higher fee of ?1,499 with a 85% loan to value.
Luton Borough Council recently announced plans to introduce a mortgage scheme for first-time buyers who are unable to raise a large deposit but can afford mortgage payments. The council would act as guarantor on up to 20% of the first-time buyers mortgage with only a 5% deposit required.
Learn more on conveyancing direct or cheap conveyancing.
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