Mortgage lenders are prepared to lend first time buyers much higher amounts and offer lots of headline grabbing 'freebies' - free valuations, free legal fees, cashback, free insurance…
But beware – some nice 'freebies' doesn't necessarily make it a good deal.
Mortgage lenders are clever; they price their mortgages to recoup the cost of giving away something for free upfront. This is known as a 'sales promotion' and is used to entice you to take out the mortgage and encourage you not shop around. But, shopping around is good! You need to look at the true cost of the mortgage with the 'freebies' and compare it against other mortgages on the market to make sure you don't end up paying more for your first mortgage in the long run.
So, do your homework first – check the small print and compare the application fee and interest rates against other mortgages. Other little nasties to check for include:
Moneyfacts.co.uk can help you compare all types of mortgages to find the best deal for you through our mortgage best buys and mortgage search tool.
Lastly, a word to the wise. Everyone wants to get on the property ladder and it's easy to get tempted in by mortgage lenders offering to lend you five times your salary. But, it's essential that you also think about how much you can really afford rather than how much you need to borrow. Remember, you also need to take into consideration all of the extras such as utility bills, council tax, the TV licence and insurance, as well as general living expenses. Our mortgage calculator and budget planner can help you work out how much your mortgage will cost and what you can afford.
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
Moneyfacts.co.uk will, like most other websites, place cookies onto your computer’s
hard drive. This includes tracking cookies.