Why now is a good time to be a first-time buyer | moneyfacts.co.uk

Moneyfacts.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfacts.co.uk will always be from news@moneyfacts-news.co.uk. Be Scamsmart.

ARCHIVED ARTICLE This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

nigel woollsey

Nigel Woollsey

Online Writer
Published: 18/07/2019

Things for first-time buyers may be starting to look up thanks to declining house prices and mortgage rates. Rates for 95% loan-to-value (LTV) two-year fixed mortgages have declined month-on-month since August 2018. With both the housing and mortgage markets showing favourable signs, now is likely a good time for those looking to purchase their first home.

Housing market starting to favour buyers

Recent figures from Rightmove indicate that the housing market is moving toward a situation favouring buyers rather than sellers. Not only have house prices fallen by 0.2% this month, the first decline seen in 2019, but the average time taken to sell a home has increased to 62 days – the longest since 2013.

Furthermore, estate agents have more properties on their books now than at any time in the last four years – a situation that clearly illustrates competition is hotting up between sellers who are competing for interested buyers.

First-time buyers on the increase

It seems that first-time buyers are already enjoying these market conditions. Nationwide Building Society’s House Price Index for May reports an increase in the number of first-time buyers, bucking the trend of all other buyer types. It is likely this increase is partly fuelled from the attractive mortgages rates currently on offer for those with a 10% or even a 5% deposit.

Mortgage options for first-time buyers

This increasing competition has seen reductions in mortgage rates up to the end of May, particularly in fixed rate mortgages. This has in turn made it more affordable for a range of mortgage hunters, but especially first time buyers, who often favour this type of product for the guaranteed monthly repayments it offers.

While fixed term mortgages are a good option for first-time buyers, borrowers might also want to consider a discounted variable rate mortgage.  While these lack the security of a set monthly payment, their rates are, in many cases, cheaper. For those who are truly bamboozled by the idea of fixed rate and discounted variable rate mortgages, take a look at our beginner’s guide: What is a mortgage?

Compare the best first-time buyer mortgage deals

Moneyfacts.co.uk scours the whole market to find the best mortgage rates and deals being offered for first-time buyers. Currently, the lowest rate available to all with a 5% deposit is the Newcastle Building Society’s mortgage at 2.59% fixed to 31 July 2021, which then reverts to 4.49% at the end of this period. With a fee of £498, this product is for loans over £10,000 and overpayments are allowed. For those with a slightly larger/deposit/equity, looking for a 90% LTV mortgage, Loughborough Building Society’s discounted variable mortgage is topping our chart with a discounted variable rate of 1.74% (collared at 1.50%) for two years, after which it reverts to a rate of 5.34%. Borrowers will have to pay £999 in product fees and require a loan in excess of £25,000 – overpayments are also allowed. Take a look out our first-time buyer comparison charts or get ahead of the game with our collection of helpful mortgage guides


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. Links to third parties on this page are paid for by the third party. You can find out more about the individual products by visiting their site. Moneyfacts.co.uk will receive a small payment if you use their services after you click through to their site. All information is subject to change without notice. Please check all terms before making any decisions. This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.

happy couple sitting on floor surrounded by boxes


Moneyfacts.co.uk will, like most other websites, place cookies onto your device. This includes tracking cookies.

I accept. Read our Cookie Policy