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Top 5 mortgages for first-time buyers

Top 5 mortgages for first-time buyers

Category: Mortgages

Updated: 14/03/2017
First Published: 14/03/2017

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Taking that first step onto the housing ladder can be tricky, not least because of the deposit that has to be saved and the financial sacrifices necessary in the process, and that's before we even get to choosing the right mortgage deal.

However, getting it right is vital – choose wisely and you can be sure that your repayments will remain manageable for the duration of your mortgage term, and if you find one with extra incentives, you could even reduce the upfront costs associated with getting on the ladder. We're here to help, which is why we've outlined the top mortgages for first-time buyers – those that only require a 5% deposit – to help you take a crucial step towards realising your dream of homeownership.


Initial rate/ APRC Mortgage type/ LTV Details

Mansfield BS
2.94%
(5.1%)
Discounted variable rate
Max 95% LTV
  • Available for house purchase at up to 95% LTV
  • £499 fee
  • Discounted variable rate for two years (2.40% discount), before reverting to an existing borrowers rate of 5.34%
  • APRC cost for comparison: 5.1%
  • Incentive package of free valuation
  • Allows overpayments

This mortgage from Mansfield BS easily takes the top spot with an impressive discounted variable rate of just 2.94%, together with a competitive fee of £499 to help keep upfront costs to a minimum. An incentive package of free valuation is included to further minimise costs, while the option to make overpayments adds to the benefits, and could be ideal for those hoping to reduce their mortgage term and save money on interest payments in the process.

However, unlike its fixed rate counterparts, variable rates and subsequent repayments could change – the lender's existing borrowers rate isn't set in stone, and if that changes, the discount rate could alter accordingly – so proactive budget management will be necessary.


Initial rate/ APRC Mortgage type/ LTV Details

Ipswich BS
3.29%
(5.1%)
Fixed rate
Max 95% LTV
  • Available for house purchase at up to 95% LTV
  • £699 fee
  • Two-year fixed deal: rate of 3.29% fixed to 31.05.2019, after which it reverts to an existing borrowers rate (currently 5.24%) for the remaining term
  • APRC cost for comparison: 5.1%
  • No incentives, but overpayments allowed

In second place is this 95% LTV mortgage from Ipswich BS, offering a highly competitive rate of 3.29% that's fixed for two years to give borrowers complete repayment security for the duration of the initial term. This guarantee could offset the slightly higher fee of £699, and while it doesn't come with any incentives, it again allows overpayments for some added flexibility.


Initial rate/ APRC Mortgage type/ LTV Details

Principality BS
3.45%
(4.6%)
Fixed rate
Max 95% LTV
  • Available for house purchase at up to 95% LTV
  • No product fees
  • Two-year fixed deal: rate of 3.45% fixed to 30.04.2019, after which it reverts to an existing borrowers rate (currently 4.74%) for the remaining term
  • APRC cost for comparison: 4.6%
  • Incentive of £1,000 cashback
  • Allows overpayments

Achieving a top-three spot is this deal from Principality BS, another two-year mortgage at 95% LTV, but this time with a range of added incentives that could be perfect for buyers looking to keep upfront costs to a minimum.

It boasts a rate of 3.45% that's fixed until the end of April 2019, and although the rate's slightly higher than its predecessor, the deal comes with the benefit of having absolutely no product fees. Not only that, but it offers cashback of £1,000 on completion, adding to its cost-effective credentials, and the option to make overpayments means it becomes even more appealing to would-be borrowers.


Initial rate/ APRC Mortgage type/ LTV Details

Tipton & Coseley BS
2.88%
(4.4%)
Discounted variable rate
Max 95% LTV
  • Available for house purchase at up to 95% LTV
  • No product fees
  • Discounted variable rate to 29.02.2020 (1.86% discount), before reverting to an existing borrowers rate of 4.74%
  • APRC cost for comparison: 4.4%
  • Allows overpayments and draw down

Next is this deal from Tipton & Coseley BS, a discounted variable rate mortgage with an initial term that's just shy of three years. It again only asks for a 5% deposit and has no product fees whatsoever, while the lack of incentives is compensated by the extra degree of flexibility: not only does it permit overpayments, but borrowers are also able to draw down from the mortgage balance should they need to, provided certain conditions are met.


Initial rate/ APRC Mortgage type/ LTV Details

Hinckley & Rugby BS
3.69%
(4.9%)
Fixed rate
Max 95% LTV
  • Available for house purchase at up to 95% LTV
  • £999 fee
  • Five-year deal: rate of 3.69% fixed for five years, after which it reverts to an existing borrowers rate (currently 5.64%) for the remaining term
  • APRC cost for comparison: 4.9%
  • Free valuation fees (for properties valued up to £1m)
  • Allows overpayments

Just squeezing into the top five is this mortgage from Hinckley & Rugby BS, a deal that could be perfect for those seeking repayment security for the long-term – it boasts a rate of 3.69% that's fixed for five years, which could offset the fee of £999 for some borrowers. It also comes with free valuation to further offset the upfront costs, while the option to make overpayments adds some welcome flexibility.

Information & rates correct as at: 14.03.2017

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.

 
 
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