Although getting a mortgage is still tougher than it was before the changes wrought by the financial upheaval in 2008, mortgage lenders are keen to attract new borrowers. Savvy borrowers can find some attractive deals as banks gradually become less cautious and start trying to drum up fresh custom.
First time buyers in particular have felt the pinch as the mortgage landscape has changed. The stamp duty holiday enacted to stimulate the housing market is now over, making things even tougher for those looking to buy their first home. First time buyers often need some assistance to take that first step onto the property ladder. Enter Santander, who have introduced a new range of mortgages aimed at first-time buyers to help them do just that.
The selection of new first time buyer mortgages includes two fixed-rate products, one for three years and one for five. With the recent hikes in variable rate mortgage payments by some big name lenders, fixed rate mortgages are becoming a more attractive option for both established borrowers looking to remortgage and for first-time buyers.
A fixed rate is less flexible but gives you the peace of mind that comes with knowing what your future mortgage payments will be for the next few years. A fixed mortgage can be very helpful when making future plans, as you don't have to factor in as much financial wiggle room as someone on a variable mortgage might. In an uncertain financial climate, a fix deal is a good option.
One of the fixed rate mortgages offered by Santander is an 85 per cent loan to value (LTV) deal. This means that you must put down a deposit totalling 15 per cent of the property's value. The rate is fixed at 4.89 per cent for three years. For those who can't muster a 15 percent deposit, Santander also offer a 90 per cent LTV deal, requiring that you find only 10 percent of your property's value. This deal is fixed at 5.99 per cent for five years.
These rates are, admittedly, somewhat higher than you might be hoping to pay for a fixed term mortgage. This is offset, however, by a dramatic reduction in the up front charges normally faced by new homebuyers. These costs are often more of a challenge for new buyers than the actual mortgage payments and can be a deal breaker for some households.
To make life easier for new buyers, Santander offers dramatically reduced fees in comparison to those charged for a similar product by its rivals. You would normally expect to pay a fee of between £500 and £1000 for a mortgage; Santander is levying a fee of just £99, making its products much more affordable for those who have not yet been able to put aside a substantial amount in savings.
Additionally, all of Santander's new mortgage products come with the bank's "Homebuyer solution" package as standard. This includes a free valuation and £250 cashback on completion of the sale. The package is tailored to assist customers who might otherwise struggle to meet the up front costs of buying their first home.