Real first time buyer rates

DrSpendLittle · 20 June 2019 at 2:49PM

Depends on LTV and length of product.

We've got a 5 year fix at 1.9% with a LTV of 73.5% - just about to exchange, mortgage was offered to us in April.

I did a search the other day and some companies are offering as low as 1.84% for 5 year fix or 1.39% on a 2 year fix for LTV of 73.5%

We we were advised that rates are applied at 5% intervals i.e.

94.9% - 90%;
89.9% - 85%,
84.9% -80%
79.9%-75%
74.9% - 70%

etc etc

Worth trying to scrape together as much as you can to get into the lower LTV band if possible.

Stultus · 20 June 2019 at 3:01PM

Don’t forget that a lower rate isn’t always a cheaper product. For example if you have one with a large fee this can end up being more expensive even if it’s a lower rate. I’d recommend using a whole of market mortgage broker (like London and country) or at least look at the MSE mortgage best buys and order them by ‘MSE total cost assessment’ to see which is actually the best deal.

As others have mentioned, if a bank is willing to lend to you then you’ll get the stated rate. I’d definitely recommend discussing with a broker if you have any reason to think you might not be accepted by a lender though.

stayathomeandsave · 20 June 2019 at 3:14PM

The other good thing about a broker is that they take the stress out of sorting a new product at the end of fixed period before it moves onto higher standard rates automatically. They should get in touch with you well in advance with the options available to you at the time.

joshp1993 · 20 June 2019 at 7:34PM

Also a first time buyer and will be using the Help To Buy Equity Loan scheme (so our deposit is 5% then the Government's is 20%), and got a 5 year fix at 2.13% (could've been 2.02% but wanted one without a fee just in case anything went wrong!).

casper_g · 20 June 2019 at 8:50PM

ilikepancakes wrote:

Hmm... 5% LTV difference makes such a big impact on interest rate?

On a 90% mortgage the amount of deposit the you're putting down is 100% more than on a 95% mortgage (i.e. double). It's not 'just' a 5% difference in LTV!

bopsybunny · 21 June 2019 at 12:24PM

90% LTV on 5 year fix at 2.49% with no fees, in Dec 2018. Could have got lower rates, but with fees they would have cost more over the fixed period.

ilikepancakes · 21 June 2019 at 3:21PM

casper_g wrote: »

On a 90% mortgage the amount of deposit the you're putting down is 100% more than on a 95% mortgage (i.e. double). It's not 'just' a 5% difference in LTV!

You know... it is 100% more from my point of view but our property price is £255k, at the moment we have 5% deposit and if we go to 10% deposit, it will be just 5.3% less money to lend from Bank's perspective.

It is what it is however I'm really surprised with such a big difference. From £1100 to £900 per month is a huge difference.

I hope that after 2 years when I pay off 5% of the balance I will get such a low rates

JimmyTheWig · 21 June 2019 at 3:47PM

ilikepancakes wrote: »

You know... it is 100% more from my point of view but our property price is £255k, at the moment we have 5% deposit and if we go to 10% deposit, it will be just 5.3% less money to lend from Bank's perspective.

It is what it is however I'm really surprised with such a big difference. From £1100 to £900 per month is a huge difference.

I hope that after 2 years when I pay off 5% of the balance I will get such a low rates

The thing is, it's a secured loan. If you don't pay the money back, they sell your house.
Imagine how much easier it would be for them to get £180k than £190k for a house worth £200k. That's the difference you're paying for.

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Real first time buyer rates

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