M&S Bank has launched its first range of mortgage products, with a particular focus on the first-time buyer market.
The British retail giant has offered other financial products such as credit cards, current accounts and personal loans for several years, but this marks its first venture into mortgages.
Its arrival in the mortgage market follows in the footsteps of retail rivals Sainsbury’s and Tesco.
Unusually for new entrants to the mortgage market, in addition to a number of fixed and tracker options, M&S Bank has launched several competitive products targeting first-time buyers
Its first time buyer range includes two- and five-year fixed rate mortgages and two-year tracker mortgages, from 60% to 90% loan to value (LTV), on terms up to 30 years.
For example, it has a five-year fix for borrowers at 90% loan-to-value (LTV). This 2.59% rate comes with fees of £995, but cashback of £1,000 on completion. Research by financial data service Moneycomms shows that this would be the cheapest loan on the market for a first-time buyer looking to borrow £180,000 against a property worth £200,000.
M&S Bank’s mortgages will be available direct from the lender and through mortgage brokers. The bank will donate £25 from every mortgage to housing charity Shelter.
‘It’s good to see some extra competition’
Andrew Hagger, financial analyst and founder of Moneycomms, says he welcomes the extra competition in the sector.
“Having featured consistently towards the top of the best buy tables with personal loan and credit card products for many years, it appears M&S Bank is following a similar strategy with its mortgages,” he says.
“First-time buyers will be pleased to see a new entrant showing its support for their sector of the market rather than playing it safe with low LTV mortgages.
“It’s good to see some extra competition in the residential mortgage space from one of the UK’s biggest brand names – hopefully it will put pressure on other players to keep pricing low.”
Remember to always search the market before choosing a mortgage. Get help finding the best deal for you using Moneywise and L&C’s comparison tool.