First Time Buyers And New Uk Homeowners Receive Lower Interest Rates

The Bank of England have revealed figures that show new homeowners who secured a

new mortgage can now benefit from the lowest interest rates in 6 years! Fixed-rate home loans have fallen to their cheapest level for six years. The Co-Operative Bank, Northern Rock, and the Chelsea Building Society all revealed competitive deals recently.

There was a fall to 5.49% from 5.56% in February 2010 on a 5 year fixed rate mortgage. A 2 year fixed-rate deal has fallen to 3.88% on average last month, the lowest rate since July 2003.

The reason for the fall in interest rates is due to lenders competing to attract good-quality borrowers and encourage existing customers to remortgage.

First Time Buyers And New Homeowners

The Nationwide Building Society Group has revealed 'The Mortgage Works,' an innovative new range of guarantor home loans which can help the UK's first time buyers in their approach to buying a house or apartment.

The Mortgage Works allows parents or relatives to be financially responsible, for a proportion of the mortgage, therefore removing the risk of backing the entire loan. This is a welcome deal from young professionals that try to get on the property ladder, as we all know how hard it can be. The applicant must be able to afford at least 70% of the loan repayments, therefore the guarantor must be able to make up the remaining 30%, and requires a 10% cushion. A positive step for the housing market and relieves some of the stress on first time buyers when purchasing a property.

Other companies have taken a different approach, scrapping the guarantor deals, and promoting another approach, like the "Lend a Hand" deal by Halifax. It allows first time buyers to borrow anything up to 95% of properties value, this requires the backing of savings from a parent or relative, and is in response to very strong demand for mortgages in recent times.

Small deposits such as the schemes above have allowed first time buyers a choice in how they approach trying to obtain a mortgage.

A new home owner may take another approach, which would be a shared equity scheme that can help when buying an apartment or house. One such property that offers this scheme is The Hub in Manchester, where you can buy a studio, 1 bed, 2 bed or 3 bed apartments in Manchester.

by: Sinead Jones

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