First Time Buyers - Introductory Rate Help

bmouthboyo

Simple question really that we have heard mixed responses about.

When we get a mortgage we understand you get a kind of introductory offer. Example TSB offer 1.24% for 24 months then it will go to say 3.4%.

What I wanted to ask was can you then simply chose another mortgage with a good introductory offer and swap? Obviously there are fees and you need to weigh these up to see if it is worth while, but is it really in essence the same as credit card tarting where you go from one to the next each time getting an introductory offer?

A colleague recently said that many mortgages will not offer you this introductory rate as it will not be a first time mortgage, however I have never seen this said online.

Lastly if indeed you can simply keep remortgaging after the intro rate, having checked the fees don't outweigh the benefits, is this this always going to be an option in the future? i.e. Have these introductory offers been around for a long time or are they a new thing to encourage borrowing say during the recession?

I find it hard to believe that anyone would stick with a mortgage provider and pay 2% on top rather than move to a better intro deal with someone else?

Contemptuous

Mortgage lenders have customer retention products (if you're using the TSB example, look on their website - mortgages, existing customers, and you'll see the current fixed rates they offer their customers to avoid reverting onto the homeowner variable rate). Switching in this way doesn't incur any costs, nor does it currently involve any checks on credit or affordability.
Of course you have the option to remortgage to another lender whenever you see fit - it's a case of weighing up the costs at the time. Lenders will often pay for a valuation and legal fees for remortgage customers, but there may be a product fee applicable (and ERCs if you end your current deal early).

getmore4less

What LTV are you looking at?

TSB FTB rates that low look to be for below 60%LTV. not your regular cash strapped FTB.

http://www.tsb.co.uk/mortgages/first-time-buyer/2-year-fixed-rates/

compare to the retention deals
http://www.tsb.co.uk/mortgages/existing-customers/2-year-fixed-rate-mortgages-existing/