What are the best mortgage products on the market for First Time Buyer in 2022
Buying a House is not cheap and can be a tad bit complicated for a novice that is why we wrote this quick guide so we can give you a brief insight into what mortgage products are out there for the first-time buyer.
First off there are literally thousands of home loans out there, but which mortgage lenders are best for the First Time Buyer?
Firstly, it’s important to acknowledge that household budgets are under pressure due to the 5.4% rise in inflation, so the idea of a long-term fixed rate or low -deposit mortgage which requires less savings can be more desirable. A long-term fixed rate just means that the rate you pay back on the loan will stay at a fixed interest for an agreed term, unlike a mortgage loan which is affected by the Bank of England base rate (BoE) which can fluctuate affecting the amount of interest you need to pay.
The best deals when it comes to mortgages come from really searching what’s out there in the market, so if you only look at 1-2 lenders you could miss out on cheaper rates, long-term fixed rates and generous income stretches.
Some bank accounts such as The Nationwide have product such at the “Helping Hand “which allows you to borrow up to 5.5 x your annual income to boost First Time Buyers power.
You should also look at what range of deposit deals lenders offer from low to no deposit all, fee free options, cashback incentives and mortgage terms of up to 40 years if you are looking to keep your monthly repayments low.
If you do not have the “Bank of Mum and Dad” to go to there are many other guarantor options to help you on the property ladder such as joint borrower, and sole proprietor arrangement.
The key to finding the best Mortgage lenders for a First Time Buyer…is to do your research or let us do it for you for free! Click here to enquire today
But for now, here’s a roundup of some of the best mortgages for First Time Buyers out there:
The Yorkshire Building Society – first-time buyer exclusive
Rate – 2.36%
Type – fixed rate
Duration – two years
Minimum deposit – 5%
Mortgage fee – £995
Pros: Free valuation, £250 cash back when mortgage completes
Cons: Overpayments of your mortgage are restricted to 10% of your balance each year. Early repayment of loan options includes a financial penalty.
Santander – residential mortgage range
Rate – 1.64%
Type – fixed rate
Duration – two years
Minimum deposit – 10%
Mortgage fee £999
Pros: 10% deposit, allows first-time buyers to lock into a low fixed rate for two years. The deal comes with Santander’s Homebuyer Solution package which includes a free standard valuation and £250 cash back on completion.
Cons: Penalties apply if you repay within two years.
Pros: First-time buyers can borrow up to 5.5 times their salary. Ten-year fixed rate deals are available along with fee-free options. Free valuation and £500 cash back on completion. Mortgage term of up to 40 years allowed.
Cons: Self-employed borrowers are excluded. Early repayment fees apply.
HSBC – sub 1% for deposit-rich buyers
Rate – 1.24%
Type – tracker mortgage
Duration – two years
Minimum deposit – 40%
Mortgage fee £999
Pro: No early repayment charges apply.
Con: The mortgage rate is 0.74% more than the Bank of England base rate, currently 0.5% – so you pay 1.24%. If the base rate rises, so does your mortgage rate.
Metro Bank – joint borrower, sole proprietor
Rate – 2.09%
Type – fixed rate
Duration – two years
Minimum deposit – 25%
Mortgage fee – £999
Pro: You can add immediate family members to your application to boost your borrowing. Everyone named on the mortgage is liable for the debt. The extra applicants are not named as owners of the property.
Con: Overpayments of 20% a year are allowed anything over will incur penalty free.
Barclays – Family Springboard
Rate – 3.7%
Type – fixed
Duration – five years
Minimum deposit – 0%
Mortgage fee – £0
Pros: Family Springboard is a guarantor mortgage. Family or friends deposit the equivalent of 10% of the purchase price of your property into a Barclays savings account this is locked away for five years. If you keep up to date with your payments for five years, your helpers get their savings back with interest. A 35-year mortgage term is available.
Cons: Early repayment charges apply.
As mortgage brokers we will always have access to the best deals on the market. We provide a free advised sale making you feel safe in the knowledge that we will guide you every step of the way.