Best mortgage deals for first-time buyers

14 January 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

Post Office Money, up to 90% LTV, 2.28%
Fixed until 31 January 2022, then reverts to SVR (currently 4.74%)
This mortgage from Post Office Money costs £788 in monthly repayments and comes with £500 cashback. There are no scheme fees and the annual cost is £9,203.

TSB, up to 90% LTV, 2.29%
Fixed 28 February 2022, then reverts to SVR (currently 4.24%)
This mortgage from TSB comes with £789 in monthly repayments for an annual cost of £9,213. There are no scheme fees and cashback of £500.

FIVE YEAR FIX

Post Office Money, up to 90% LTV, 2.34%
Fixed until 31 January 2025, then reverts to SVR (currently 4.74%)
This mortgage costs £793 a month - £9,517 per year over the fixed period - and comes with no scheme fees. 

10 YEAR FIX

Virgin Money, up to 90% LTV, 2.79%
Fixed until 1 May 2030, then reverts to SVR (currently 4.99%)
This deal from Virgin Money offers a 2.79% rate, fixed for 10 years. This mortgage costs £834 a month - £9,997 per year over the fixed period.

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, 1.82%
Fixed until 28 February 2022, then reverts to SVR (currently 4.74%)
There are no fees with this loan and cashback of £400. Monthly repayments are £623 so the effective annual cost is £7,273.

FIVE YEAR FIX

First Direct, up to 85% LTV, 1.59%
Fixed for five years, then reverts to SVR (currently 4.99%)
This mortgage costs £606 a month - £7,373 per year over the fixed period - and comes with scheme fees of £490. 

10 YEAR FIX

Accord Mortgages, up to 75% LTV, 2.32%
Fixed until 31 May 2030 then reverts to SVR (currently 4.99%)
This deal from Accord offers a 2.32% rate, fixed for 10 years. This mortgage costs £659 a month - £7,962 per year over the fixed period and no fees.

Variable rate mortgages

The Loughborough Building Society, up to 90% LTV, 2.39%
2.95% for two years, then reverts to SVR (currently 5.34%)
For buyers who are willing to risk a further rate rise (or gamble on a rate cut), The Loughborough offers 2.39% for two years. The monthly cost is £798 putting the annual cost at £9,321.

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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