First-time-buyers - read the small print of low mortgage rates
Yorkshire Building Society has been splashed across the news pages this past week. They have just launched the lowest mortgage rate ever to be made available in the UK, at 0.89% and I expect other lenders will be following suit very soon.
However, as tempting as they may look, always remember to check the small print. Take Yorkshire for example. At first glance it’s a good deal, but it’s not actually going to benefit everybody, especially first-time-buyers in Bath who already struggle to find deals they can afford in what is a very strong property market.
Firstly, the buyer is going to need a sizeable deposit as this mortgage is only available for anyone borrowing up to 65%. One of the main reasons first-time-buyers can’t get onto the housing ladder is because they’re not able to save up for the deposit. So this is already a big obstacle.
Secondly, there is supposedly an upfront product fee of £1,495. With first-time-buyers already strapped for cash, this is a lot of money for them to part with.
Their credit ratings will probably have to be excellent too.
Furthermore, this is only a two year variable mortgage. At the end, the homeowner will either have to re-mortgage or continue paying Yorkshire’s standard variable rate, whatever it is at that time.
I really feel for first-time-buyers as once again, they miss out. However, there are other mortgage deals available that can enable them to buy their first home in Bath. Therefore, my advice to such buyers is to do your research and ALWAYS use a knowledgable estate agent.