Best mortgage deals for first-time buyers

Each week, we’ll review the market to show you the best variable and fixed rate deals currently available, whatever your deposit. Our example first-time buyer has a 10% deposit and is looking to buy a £200,000 property over 25 years. 

For ease of comparison, we’re assuming any bank or building society fees are paid up front, and if you can afford to do so it’s worth it. If you don’t, interest will be charged on the fees, which will add hundreds of pounds to the overall cost of your mortgage.

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Fixed rate deals

Loughborough Building Society, up to 90% LTV, 2.19%
Fixed for two years then reverts to SVR (currently 4.84%)

The Loughborough has the most competitive fixed-rate deal for first time buyers. Its two-year 2.19% fix comes with a £499 product fee will cost £780 per month, £19,212 over two years. Despite being a smaller mutual, Loughborough lends across England and Wales.

Yorkshire Building Society, up to 90% LTV, 2.49%
Fixed until 31 January 2019 then reverts to SVR (currently 4.74%)

This deal from Yorkshire Building Society comes without a fee and offers £250 cashback on completion. Repayments are £807 a month, and £19,118 over the first two years. 

Longer fixed rate deals

West Bromwich Building Society, up to 90% LTV, 2.99%
Fixed until 28 February 2022 then reverts to SVR (currently 3.99%)

For those looking to fix for a longer period the West Brom offers a 2.99% rate, fixed until February 2022. This mortgage costs £853 a month - £20,236 over two years - and comes with £1,000 cashback, although an initial £199 fee is charged.

Nationwide, up to 90% LTV, 3.89%
Fixed for 10 years then reverts to SVR (currently 3.74%)

Many 10-year fixes are also available. If you’re comfortable paying a £999 product fee up front, Nationwide offers a long fix with a rate of 3.89%. This will involve monthly repayments of £939 and an outlay of £22,816 over the first two years.

Variable rate mortgages

Loughborough Building Society, up to 90% LTV, 1.89%
2.95% discount for two years then reverts to SVR (currently 4.84%)

For buyers who are willing to risk a rate rise (or gamble on a further rate cut), Loughborough Building Society lends at 1.89% for two years, a discount of 2.95% of the standard variable rate. There is no cash back incentive and there is an upfront product fee of £499 payable. The product reverts to a 4.84% rate after two years.

Larger deposits

NatWest, up to 75% LTV, 1.67%
Fixed until 30 April 2019 then reverts to SVR (currently 4.74%)

Better rates are available with larger deposits and NatWest offers a two year fixed rate up to 75% LTV at 1.67% to April 2019. There is no upfront fee or cashback incentive with this particular mortgage. The monthly repayments on a £150,000 advance are £612 and total repayable over the two year term comes to £14,810.

Yorkshire Building Society, up to 75% LTV, 1.79%
Fixed until 31 January 2019 then reverts to SVR (currently 4.74%)

At 75% loan to value, Yorkshire Building Society offers a two-year fix at 1.79%. There are no upfront fees and £250 cashback sweetens the deal. Monthly repayments are £621 so the effective two-year cost is £14,848. 

Interest-only deals

If you’re looking for interest-only options, remember the rules are now a lot stricter and you’ll need to show a well-thought out plan for repaying the capital at the end of the mortgage. Monthly repayments are much lower than with capital repayment, but you'll pay more interest on an interest-only mortgage in the long run.  

Not every provider will lend on an interest only basis, so if you’re looking for one it’s best to speak to a mortgage broker. Our mortgage tool can help you get a feel for the rates on offer.  

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