Best mortgage deals for first-time buyers

Each week, Moneywise reviews the market to show you the best variable and fixed rate deals currently available for high loan to value (LTV) borrowers.

Remember that once any fixed rate period ends the mortgage will revert to a standard variable rate (SVR), so make a note in your diary and switch to a cheaper deal when that happens.

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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. Otherwise interest will be charged on the fees, which will add hundreds of pounds to the overall cost of your mortgage.

Fixed rate deals

Yorkshire Building Society, up to 90% LTV, 1.97%
Fixed until 31 August 2019 then reverts to SVR (currently 4.74%)

This mortgage will cost £760 per month, £9,599 per year over two years. Fees are £950 after cashback.

HSBC, up to 90% LTV, 2.34%
Fixed until 30 September 2019, then reverts to SVR (currently 3.69%)

This deal from HSBC comes with no fees. Repayments are £793 a month, which is £9,603 a year over the first two years. 

Longer fixed rate deals

Hinckley & Rugby Building Society, up to 90% LTV, 2.59%
Fixed for five years then reverts to SVR (currently 5.64%)

For those looking to fix for a longer period then Hinckley & Rugby offers a 2.59% rate, fixed for five years. This mortgage costs £816 a month - £10,037 per year over the fixed period - and comes with £999 in fees.

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 willing to fix for longer. If you’re comfortable paying an upfront £999 product fee, Nationwide offers a long fix with a rate of 3.89%. This will involve monthly repayments of £939 and an outlay of £11,408 per year.

Variable rate mortgages

West Brom Building Society, up to 90% LTV, 2.59%
1.4% discount until 30 June 2019, then reverts to SVR (currently 3.99%)

For buyers who are willing to risk a rate rise (or gamble on a further rate cut), West Brom Building Society offers a 1.4% discount on its SVR. There is a whopping £1,000 cashback incentive and no upfront fees. The annual cost is £9,406.

Larger deposits

Halifax, up to 75% LTV, 1.96%
Fixed until 30 September 2019 then reverts to SVR (currently 3.74%)

There are £355 in upfront fees to pay, but £1,000 cashback more than covers this outlay. Monthly repayments are £633 so the effective annual cost is £7,272. 

Platform, up to 75% LTV, 1.54%
Fixed until 31 July 2019 then reverts to SVR (currently 4.74%)

Platform offers a two-year fixed rate up to 75% LTV at 1.54%. There are £49 in fees to pay after cashback. The monthly repayments on a £150,000 advance are £603, equivalent to £7,332 a year. Platform's mortgages are only available through a mortgage broker.

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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