Saturday, May 7, 2022

First Direct is introducing a 5% down payment mortgage to help first-time buyers

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First Direct claimed the mortgage offered the best fixed rates available for 5 percent depositors. The mortgages offered can be held for a maximum term of 40 years.

The mortgage, aimed at first-time buyers and movers, is fixed at 2.94 percent for two or five years and includes a free standard appraisal. There is no product fee.

First Direct has launched its first-ever 95% mortgage.

Borrowers can also secure a maximum of £550,000 over a maximum term of 40 years.

First Direct claims the mortgage offered the best fixed interest rates available for 5 percent depositors.

The bank also offers its customers the ability to make unlimited overpayments whenever they want – a feature already available to its existing mortgage customers.

This mortgage is available to first-time buyers, movers, and existing First Direct customers who wish to transfer their mortgage.

First Direct offers an Agreement in Principle (AIP) for up to six months – double the typical AIP – giving buyers much-needed time to find their perfect home.

First Direct Chief Executive Chris Pitt said: “Stamp duty has supercharged the housing boom, which shows little sign of abating.

“As the real estate market continues to race in the fast lane, first-time buyers are left behind. As property prices continue to outpace deposits, we see this as a viable way to help people up the ladder.”

First Direct mortgages are only available online and over the phone and are not processed through mortgage brokers.

Earlier this month, Halifax cut rates on its five- and 10-year fixed-rate mortgages, making them cheaper than two-year mortgages, which are traditionally the cheapest of all fixed-rate mortgages.

Experts claim the “anomaly” is because the money markets, which price mortgages, have discounted a recession and the possibility of rising interest rates.

As people look for longer-term offers, lenders increase the price of the less popular offers.

Rhys Schofield, managing director of Peak Mortgages and Protection, dismissed First Direct’s claim that the rate was market-leading. He said: “Others are cheaper overall and even First Directs holders, HSBC, have a lower rate for 2 and 5 year fixed rates (as of 4/27/22), even without fees. That’s why anyone who needs a mortgage should go on Google, search for mortgage advice in their area, and contact whoever has the best reviews because they’ll do all that grunt work for you. “

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