Mortgage price war improving rates for first-time buyers

by Aaron Strutt

Jan 08 2019

The mortgage price war is helping first-time buyers to access more competitively priced low deposit rates.

Figures published in The Sunday Times highlight the lowest two-year fixed rate available to borrowers with a 10% deposit is 0.3% higher than the best-fixed rate with a 40% deposit. This is down from 0.55% in December 2017. With five-year fixes, the difference is 0.45% - down from 0.74% a year ago.

Aaron Strutt, product director at Trinity Financial, says: “Borrowers with smaller deposits typically pay higher interest rates than other buyers, but the gap is reducing. There are lots of options as more lenders target first-time buyers.”

HSBC for Intermediaries is offering one of the most competitively priced mortgages if you have a 10% deposit. The 1.79% rate is fixed until 30 April 2021. At the end of this period, it reverts to the lender's variable rate currently of 4.19%. The overall cost for comparison is 3.83% APRC representative.

The mortgage has a £999 arrangement fee, and the maximum loan size is £400,000. Early repayment charges apply for the fixed period. 

Representative example: A capital and interest mortgage of £337,500 payable over 25 years, initially on a 1.79% fixed rate until 30/04/2021 and then on a variable rate of 4.19% for the remaining 23 years, would require 26 monthly repayments of £1,396.26 followed by 274 monthly repayments of £1,781.28.

The total amount repayable would be £374,156,60 made up of the loan amount, plus interest (£186,873.48) and £999 (product fee), £295 (final repayment charge), £30 (completion fee). The overall cost for comparison is 3.83% APRC representative.

The actual rate available will depend on your circumstances. Please ask for a personalised mortgage illustration.

Call Trinity Financial on 020 7016 0790 to secure a first-time buyer mortgage