First Direct has launched its first ever 5% deposit mortgage to first-time buyers and home movers, making it one of just a few UK challenger banks to enter the 95% LTV market.
Borrowers can secure up to £550,000, with no product fees, and the option to secure some of the best fixed-rates for 5% deposit holders. The mortgages available, which can be held up to a maximum 40-year term, are:
- Two-year fixed rate at 2.79%; zero product fee; free standard valuation
- Five-year fixed rate at 2.94%; zero product fee; free standard valuation
The five-year fixed rate of 2.94% is now the most competitive on the market for 5% deposit holders from a major UK lender.
In a move to embolden 5% deposit holders,First Direct is also offering customers the opportunity to make unlimited overpayments, whenever they choose - a feature which is already available to its existing mortgage customers.
This mortgage is available to first-time buyers, home-movers as well as existing First Direct customers looking to port their mortgage.
Recent data from UK Finance reveals that home-movers were responsible for sustaining the property boom, as mortgage loans increased by 29% between 2019 and 2021.
Conversely, the volume of first-time buyer mortgages rose by just 15% over the same period.
First Direct offers an Agreement in Principle (AIP) for up to six months - double that of the typical AIP - giving buyers much-needed time to find their perfect home.
Commenting on the new rate, Chris Pitt, CEO of First Direct, said: “While the property market continues to speed along in the fast lane, first-time buyers have been left behind.
“While house prices continue to outpace deposits, we see this as a viable way of helping people onto the ladder.”
In October last year, first direct was named one of just two Which? Recommended Mortgage Providers, making it one of the best mortgage lenders in the UK.
First Direct mortgages are only available online and over the telephone and do not operate through mortgage brokers.
A number of useful guides and calculators are available on the website here.
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