First-time buyers can benefit from a mortgage interest rate initially as low as 3.75%, as the bank announces price reductions on 100 mortgages.
The lender, which offers its mortgages directly to customers, has today reduced interest rates by as much as 0.27%.
It comes just after First Direct changed its mortgage policy, meaning first-time buyers with a deposit of 10% or more can now borrow up to 5.5 times their salary – up from 4.5 times what was the norm.
The change, it explained, is aimed at helping first-time buyers secure their position on the ladder in a competitive housing market.
And now it also offers highly competitive rates to those taking this first step towards home ownership. The 3.75% rate is available on the Standard Mortgage with 60% LTV 2 year fixed fee, which is available to first-time buyers and home movers.
This means borrowers must have a minimum 40% down payment to take advantage of the rate.
However, for those with smaller deposits, today’s cuts include new prices for first-time buyers who borrow 80% or 85% of the value of their property. The three-year fixed repayment mortgage options for these loan values have been reduced by 0.27% and are now offered from 4.06%. The interest rate of the 90% LTV 3 Year Fixed Fee Saver has also been reduced by 0.24%.
All two-year fixed repayment options for first-time buyers and movers up to 85% Loan-to-Value (LTV) are now priced below 4% in the Fixed Fee Standard range.
Earlier this year, First Direct also announced a change to the stress rates used in calculating mortgage affordability, a move that could benefit around 85% of mortgage applicants, allowing them to borrow an average of £22,000 more.
Liam O’Hara, Head of Mortgages at First Direct, said: “We are committed to helping first time buyers get onto the property ladder, both by making borrowing as affordable as possible and by enabling people to borrow more, within the boundaries of responsible lending.
“Recent changes to our mortgage policy, combined with the new rates, strengthen what is already a great proposition, focused on customer support and flexibility.
“As always, we continue to review our prices regularly to ensure the best value for all our customers.”