UK mortgage market hots up with new products launched
20-09-2012
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Lloyds TSB has launched a new first time buyer mortgage with no product fee. It is a seven year fixed rate loan with 500 cash back and it claims it has the added attraction of offering customers the opportunity to fix their borrowing costs over a longer term. It is offered at a rate of 5.89% and is available with an LTV of 85% to 90%.
There is no question that first time buyers have to overcome major hurdles to join the property ladder; but this product has been designed specifically with them in mind. With a 10% deposit, the certainty of monthly payments over a long period, the removal of the product fee and 500 cash back at a time when they need it most this offers a real solution for aspiring homeowners, said Stephen Noakes, director of mortgages, Lloyds TSB.
In July this year, Lloyds Banking Group unveiled the UK's largest commitment to first time buyer lending by confirming it will lend 5 billion to first time home owners by the end of 2012. It says that it will help over 50,000 people buy their first home by the end of 2012. This latest offer follows the Group's participation in the Government's Funding for Lending scheme and is part of its ongoing commitment to the first time buyer market. With the support of this scheme the Group aims to lend ã500 million to first time buyers at more competitive rates. Meanwhile, the Co-op bank has launched a five year fixed rate deal at 4.79% with an 85% LTV and no arrangement fee. It has also reduced the rates on over 20 mortgage products.
The Co-op Bank is putting its money where it?s ethical mouth. It is showing a real commitment to helping first time buyers and supporting existing home owners, suggesting that the government's drive to get the banks lending again isn't falling on deaf ears, said Michael Ossei, personal finance expert at uSwitch. Despite the base rate sticking at an all time low of 0.5%, borrowers generally haven't been getting a fair deal from lenders, he added. He also said that it shows that the Co-op means business and is prepared to do battle with other lenders. ?With HSBC having also recently launched a seven year fixed rate mortgage at 90% LTV with a rate of 4.89% and no fees, as competition heats up, consumers will be the winners, he pointed out.
