Good rates for first time buyers

Research by comparison website Moneyfacts suggests that building societies are currently offering the most competitive mortgage deals for first-time buyers compared to high-street lenders. Analysis of mortgages with loan-to-value ratios of 90% and 95% found that building societies, on average, offer lower-priced home loans than the market averages of all lenders.

While the combined average rates from the seven biggest high-street banks may be lower for some fixed mortgage terms, Moneyfacts advises that the lowest rate deals may not necessarily be the best choice when considering all associated costs and incentives. For first-time buyers, saving on the upfront cost of a mortgage is crucial, especially as they may have already spent a significant amount on a deposit, legal fees, and moving costs.

Rachel Springall, a finance expert at Moneyfacts, highlights the challenges of affordability for first-time buyers, particularly with higher interest rates this year and a shortage of affordable housing. Building societies have made efforts to be innovative, offering products such as the Track Record mortgage from Skipton Building Society and partnerships like the one between Leeds Building Society and Experian to potentially help consumers boost their credit scores.

However, regional differences continue to act as barriers for first-time buyers, according to a recent study by Coventry Building Society for Intermediaries. Springall recommends that any borrower looking to enter the property market should seek independent advice to ensure they find the right mortgage deal for their needs.

Here’s a breakdown of Moneyfacts’ mortgage market analysis of deals available to first-time buyers:

– **Average fixed rates and product counts**:
– **All lenders**:
– Two-year fixed rate at 90% LTV: 6.20%
– Two-year fixed rate at 95% LTV: 6.15%
– Five-year fixed rate at 90% LTV: 5.67%
– Five-year fixed rate at 95% LTV: 5.66%
– **Building societies**:
– Two-year fixed rate at 90% LTV: 5.76%
– Two-year fixed rate at 95% LTV: 6.03%
– Five-year fixed rate at 90% LTV: 5.18%
– Five-year fixed rate at 95% LTV: 5.47%
– **Barclays, Halifax, HSBC, Lloyds Bank, NatWest, RBS, and Santander**:
– Two-year fixed rate at 90% LTV: 5.48%
– Two-year fixed rate at 95% LTV: 5.87%
– Five-year fixed rate at 90% LTV: 4.98%
– Five-year fixed rate at 95% LTV: 5.42%

These figures reflect the average rates and product counts for two-year and five-year fixed mortgages at 90% and 95% loan-to-value ratios, with building societies generally offering more competitive rates for first-time buyers.

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