07 Jan, 2019/ by Homeward Legal /First Time Buyer
First-time buyers have had a welcome start to 2019 with the news that interest rates are falling on mortgage products with a 10 percent deposit.
A Sunday Times report noted that the cheapest two-year fixed rate deal where the buyer provides a 10 percent deposit comes with an interest rate of 1.79 percent, down from 1.84 on the best deal a year ago. The buyer also has to pay a £999 arrangement fee on that deal, which is on offer from HSBC.
Buyers who can put down a bigger deposit are often rewarded with cheaper repayment deals. The Sunday Times report suggests more lenders are willing to provide low interest rate deals to first-time buyers with a lower deposit.
In fact, it points to a two-year fixed deal from Hanley Economic Building Society, on offer with an interest rate of 2.69 percent to buyers with only a 5 percent deposit.
Broker David Hollingworth of London & Country told the paper: "The higher-deposit end of the market is saturated. Mortgage firms are finding it difficult to keep up, so they are looking at other sectors of the market where they might be better able to compete, such as borrowers with lower deposits."