Could new Lloyds mortgage help first time buyers?
Lloyds TSB has recently announced the launch of a new mortgage deal labelled the ‘low-start mortgage’. This mortgage offers consumers the chance to take out a mortgage loan with a fixed interest rate of 1.99 percent, which is fixed until February 2008. Following this initial period the rate will then rise to a fixed rate of 5.99 percent, and this will be fixed for a further four years. After the fixed term is over, the interest rate will then revert to the standard variable rate being charged by the bank.
With property prices in the UK on the rise, and with two recent interest rate hikes enforced by the Bank of England, many first time buyers with no savings or back up resources available to help them out could struggle to afford the repayments on a mortgage. However, some feel that perhaps this low rate product could help these buyers out by making the mortgage far more affordable for the initial period, giving them time to get on their feet.
Unfortunately the mortgage is only available as a ninety percent mortgage, which means that borrowers will need to find a ten percent deposit in order to benefit from the deal. This could make it difficult for first time buyers, who will not have equity from a previous property to rely on and must therefore find another way to fund the ten percent deposit. However, the offer is also available to home movers as well as those looking to remortgage, so some groups may be able to take advantage of the deal.
The managing director of mortgages at Lloyds stated: "The Lloyds TSB Low Start Mortgage will help customers who are looking to keep their mortgage payments as low as possible in the first year whilst still wanting the security of fixed payments at competitive rates for a further four years."
Alisdair Milton
5th January 2007
More Information:
- Can You Rely On Your Family To Help You Buy Your First Home?
At no time in its history has the UK housing market since such a marked increase in the average value of its housing than in the last 20 years. Today, regardless of whether you come from the North-east or South-east, more and more young Britons are having to stay at home much longer and also to look more ingenious ways to try and raise the large deposits they’ll need in order to help them purchase that first home. The big question is, can you rely on your family to help you buy your first home?
- Choosing The Right Mortgage
The market is flooded with different types of mortgages, but how do you know which one is right for you? The decision has to be yours, whether you take advice from an Independent Financial Advisor or do your own research.
- The True Cost Of Your Mortgage
It’s easy to say “go and research the market place to find the cheapest mortgage”, but is it that easy to actually do it and how do you know that you have really got the best mortgage deal when you’ve finished?
