Looking for the best mortgage deal as a first time buyer? One of the first things you'll discover when you start looking for a mortgage is that mortgage interest rates offered to first time buyers are different from those available to people who are remortgaging. The main reason for this is that home owners who are remortgaging own more equity and can access mortgage rates only available for lower LTVs (loan to value ratios).
So, if you're a first time buyer with a relatively small deposit, you won't find a deal at the below-two-percent rates available for those who are able to put down 40 per cent deposit, or equivalent. However, that doesn't mean you shouldn't look for competitive mortgage rates. The first step is to play around with a handy comparison tool – try the one developed by the online mortgage specialist Habito below.
Just at a glance, though, the best mortgage rate for a first time buyer we could find is the impressive 2.59 per cent fixed-term for three years from Bath Building Society, which is offered to successful applicants with just a five per cent deposit. However, you will need to earn at least £35,000 per annum to qualify.
There is an even better rate of 2.49 per cent on a discounted variable basis, which means that it could change if the base interest rate were to change, but theoretically should stay the same for three years. Both mortgages are subject to a £872 mortgage fee.