Best Type of Mortgage for First Time Buyers

oliveoil54

My son & partner are first time buyers & have a deposit of £15,000 & want to buy a house for approx £165,000 – 170,000. We are willing to help increase the deposit poss to max 25% deposit or to stand guarantor. They can afford to pay approx £700 – 800 per month & could poss cover £1100 max per month if rates increase dramatically (hopefully not at all, or at a much later date).

Do they fix for 2 years (3.69% Abbey 30% deposit) – 5 years (4.99% Newcastle Building Soc 25% deposit), or does they go for a discount/tracker 5year (3.94% Leek Building Soc 15% deposit – 5 year guaranteed to be 1.25% below the SVR).

Is it better to fix & have to struggle to get large 25% deposit, or take the risk that the SVR wont go up too much, especially with house prices predicted to fall next year. Does that have a knock-on effect on mortgages?

Unfortunately all the best deals seem to be for quite a short period ie 2 years and require massive deposits of 30%-40%.

I would be extremely grateful for any advice on info above and any other ideas/suggestions re-suitable mortgage options.

jill2002

You need to look at the whole package - including fees payable to determine which deal is best. I know that Abbey will provide a free valuation and £250 cashback towards legal costs, I don't know what the other companies provide.

No one knows what will happen to interest rates over the next few years. It really does depend on their circumstances. Can they afford the repayments if interest rates rise? Maybe a longer term package would be better? Without knowing their full circumstances, no one would be able to give you advice. Which is why you should see a Mortgage Advisor if you are in any doubt.