Shop around for a first-time buyer mortgage deal

Getting a foot on the property ladder has been very hard as property prices soared ahead of salaries. As the bubble has begun to deflate, there are a few glimmers of hope for first-time buyers looking for a mortgage deal they can afford.

Lenders, prodded and cajoled by the Government, are beginning to put out a few begrudging incentives for first-time buyers. In a competitive market these might begin to get a little more generous with time.

Use the comparison sites like www.moneysupermarket.com and www.yourmortgage.co.uk to keep up to date with the latest offers and to check on the best interest rates for first-time buyers.

The Halifax (www.halifax.co.uk) offers a £600 cash bonus to savers who invest their cash in one of their accounts and take out one of their first-time buyer mortgages. Pay into a saver account for 10 months in a 12 month period to receive the cash.

Halifax's first-time buyer mortgages include a 2-year fixed-rate of 3.69% for borrowers with a deposit of up to 20% of the purchase price, a rate of 4.64% for those with a deposit of between 15%-20% and a rate of 5.69% for those with a 10% deposit.

The Nationwide (www.nationwide.co.uk) operates a similar scheme called Save to Buy. After 6 months of paying in a minimum of £50 a month, customers are entitled to apply for a 95% mortgage, a deal which was previously very restricted.

RBS (www.rbs.co.uk) and its sister bank Natwest (www.natwest.com) offer no fees mortgages to first-time buyers. Given that fees are around £999, this looks generous. Then you notice that the interest rates for the first-time buyers are at least 0.1% higher. Do the sums, but if you are buying an expensive property, that 0.1% could cost you rather more than £999. That's one mortgage deal it might be worth dodging.




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