Leeds Building Society has started the year 2025 with price reductions on mortgages for customers buying their first home or renewing their current contract.
The lender has introduced interest rate cuts of up to 0.21% in a bid to help its members save on their monthly mortgage payments.
It announced these price improvements ahead of the abolition of stamp duty The land tax reduction will come into effect from April 1. This is when the stamp duty threshold for first-time buyers will drop from £425,000 to £300,000, which Leeds says would affect around one in five purchases, based on banking data from January to September 2024.
With this additional challenge ahead, Leeds wanted to make the price changes to ‘help more people into their own home’.
It was said that, based on a 90% loan on an average house price of £282,000, a first-time buyer taking the two-year interest rate of 5.25% would save more than £450 per year compared to taking an equivalent product in January 2024. .
For existing mortgage holders, Leeds Building Society is introducing rate reductions of up to 0.21%. Data shows that almost 328,000 residential mortgages will mature across the market in the first quarter of 2025, so these rate cuts will come at the right time.
Rachel Springall, finance expert at Moneyfacts, said: “First-time buyers may struggle to put down a large enough deposit to get their foot on the property ladder, so it’s great to see competitive deals being offered on the market. launched to support this. buyers.
“The market could always use more product innovation to help people struggling to get a mortgage, as those stuck paying the rent may feel their home ownership dreams are being dashed due to the lack of affordable housing, which will take time to improve.
“As we move into 2025, it will be interesting to see how lenders will strike a balance between supporting their existing customers and attracting new customers as the future of interest rates remains unpredictable.”
Meanwhile, David Hollingworth, associate director at mortgage broker L&C Mortgages, said: “With the interest rate outlook still carrying an element of uncertainty, borrowers will need to keep their mortgage costs under control.
“Lenders have been competing hard in 2024 and there is no indication that this will change in 2025.
“It is therefore encouraging to see these rate reductions being implemented so early in the year, increasing choice for first-time buyers, movers and those refinancing.
“The market is likely to move just as quickly this year, so advice will continue to play a crucial role for customers looking for the best deals for them.”