16 Dec

mortgage deals

Competition among lenders boosts mortgage deals for 1st-time buyers

Competition among lenders adds up to good news for first-time buyers looking to secure mortgage deals.

As a result of the competition, lenders are cutting the repayment rates on the deals they have on offer for newbies to home ownership.

And, in effect, the bigger a deposit a first-time buyer can bring to the table, the better the mortgage deal they can secure.

Fixed-rate mortgage deals appealing

Comparison website moneyfactors.co.uk has revealed that the average rate of repayment interest on a two-year fixed-rate mortgage dropped from 3.27 percent in November to 3.25 percent in December.

That’s on a loan-to-value (LTV) of 95 percent,. In this instance, the buyer must provide a deposit of at least 5 percent.

On five-year, fixed-rate LTV mortgage deals, for instance, repayment rates fell from 4.60 percent in November to 3.57 percent in December.

Driving interest rates down

Darren Cook, finance expert at Moneyfacts, said: “First-time buyers seem to have benefited the most during November.

“Providers appear to be once again competing for this business by driving interest rates down.”

Bigger deposit helps

Cook added: “During the latest round of competitive cuts, it appears that mortgage providers are lowering rates for those with a smaller deposit.

“The average rates at 90 percent and 95 percent are seeing greater reductions than their lower LTV counterparts.

“It is always worthwhile for a potential first-time buyer to try to raise an additional deposit and attempt to step down the ladder to find a deal offering a more favourite interest rate.”

Best fixed-rate deals

In the light of their research, Moneyfacts point to the best current mortgage deals on the market for first-time buyers.

For example, Newcastle Building Society has a 2.59 percent deal that’s fixed until February 2022.

For the best five-year fixed-rate deal, however, look to Nottingham Building Society’s 2.75 percent repayment that’s fixed until March 2025.

On balance, the more competition among lenders, the better the options for first-time buyers. Now seems like the ideal time to secure a deal for those ready to buy.


There is no obligation, and you will see your quote online rather than having to wait for an email or call.

Which service do you require?

Fixed Fee Conveyancing
No-Completion protection*
Excellent Trustpilot rating
CQS accredited solicitors
Customer Helpline Mon-Sun