Best mortgage deals for first-time buyers

31 March 2020
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Buying your first property can be a daunting task. The sheer variety of mortgage products means it can be hard to compare your options to find the best offers. 

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Each week, we review the market to find the best variable and fixed rate deals currently available for high loan to value (LTV) borrowers - these are our Moneywise Best Buys.

Remember that once any fixed rate period ends the mortgage will revert to a standard variable rate (SVR), so make a note in your diary and switch to a cheaper deal when that happens.

Our example first-time buyer has a 10% deposit and is looking to buy a £200,000 property over 25 years. For ease of comparison, we’re assuming any bank or building society fees are paid up front. Otherwise interest will be charged on the fees, which will add hundreds of pounds to the overall cost of your loan.

Best fixed rate mortgage deals

TWO YEAR FIX

HSBC, up to 90% LTV, 2.04%
Fixed until 30 June 2022, then reverts to SVR (currently 3.54%)
This mortgage from HSBC costs £766 in monthly repayments. There are no scheme fees and the annual cost is £9,197.

Bank of Ireland, up to 90% LTV, 2.25%
Fixed until 30 April 2022, then reverts to SVR (currently 4.24%)
This mortgage from Bank of Ireland comes with £785 in monthly repayments for an annual cost of £9,170. There are no scheme fees and cashback is £500.

FIVE YEAR FIX

Bank of Ireland, up to 90% LTV, 2.39%
Fixed until 30 April 2025, then reverts to SVR (currently 4.24%)
This mortgage costs £798 a month - £9,471 per year over the fixed period - and comes with £500 cashback and no scheme fees. 

10 YEAR FIX

There are currently no 10-year fixes available from lenders.

Best mortgage for larger deposits

There are good deals for those with bigger deposits. This example first-time buyer has a 25% deposit and is looking to buy a £200,000 property over 25 years.

TWO YEAR FIX

Bank of Ireland, up to 75% LTV, 1.86%
Fixed until April 2022, then reverts to SVR (currently 4.24%)
There are no fees with this loan and cashback is £400. Monthly repayments are £626 so the effective annual cost is £7,307.

FIVE YEAR FIX

First Direct, up to 75% LTV, 1.59%
Fixed for five years, then reverts to SVR (currently 4.19%)
This mortgage costs £606 a month - £7,373 per year over the fixed period - and comes with scheme fees of £490. 

10 YEAR FIX

Halifax, up to 75% LTV, 2.27%
Fixed until 31 May 2030 then reverts to SVR (currently 3.74%)
This deal from Halifax offers a 2.27% rate, fixed for 10 years. This mortgage costs £656 a month - £7,888 per year over the fixed period and fees of £200.

Variable rate mortgages

Leek United Building Society, up to 90% LTV, 1.90%
Leek offers a 3.79% discount for two years, then reverts to SVR (currently 5.69%)
For buyers who are willing to risk a further rate rise (or gamble on a rate cut), Leek offers a 3.79% discount for two years, starting at 1.90%. The monthly cost is £754 putting the annual cost at £9,150.

Interest-only mortgage deals

If you’re looking for interest-only options, remember the rules are now a lot stricter and you’ll need to show a well-thought out plan for repaying the capital at the end of the mortgage. Monthly repayments are much lower than with capital repayment, but you'll pay more interest on an interest-only mortgage in the long run. 

Not every provider will lend on an interest-only basis, so if you’re looking for one it’s best to speak to a mortgage broker. Our mortgage tool can help you get a feel for the rates on offer.

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Call free on 0800 073 1936 or see mortgage best buys online.

First published on 29 July 2015

In reply to by anonymous_stub (not verified)

I am extremely disappointed with L&C after recommending the service to my daughter in law who applied for assistance in obtaining a mortgage for 120000/130000 as a first time buyer with a deposit of 100000 available..Having given all financial details with credit check was only offered one mortgage provider The Halifax valuation fee was paid to survey the flat she required .L & C failed by recommending Halifax who canceled the paid survey as they do not give Mortgages to conversion buildings this information was not informed to my family member with other important information without her telephone inquiry of progress .I intend to place a negative review if no explanation can be given on trust pilot and others to warn other Mortgage seekers to be aware of the service provided wasting time by receiving previous incorrect information with a disgraceful service causing extreme distress at an important moment in time.RegardsR Stoughton

Thank you for the information

Thank you for the information

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