Is the UK’s lowest mortgage rate good news for first time buyers?

As the Yorkshire Building Society launch the lowest mortgage rate on record at 0.89%, the experts at Residential Matters take a look at whether now is the ideal time to buy a home.

Low interest rates have been launched by lenders looking for sales as the property market remains relatively static.

The lower rates have been reported to increase the options available to first time buyers with 10% deposits including:

  • A 2.19% rate with a £999 fee; and
  • A 2.59% rate with no fee.

Does this mean better deals are available to first time buyers?

Research has continued to show that saving for a 15% deposit will take a first time buyer a significant number of years.

However, smaller deposits have become more common in recent years offering more options to first time buyers.

The rates charged on these 95% an 90% loan to value mortgages are now moving closer to the rates charged on 85% loan to value mortgages.

This means that buyers with smaller deposit could see more favourable mortgage rates than they have in previous years.

Reading the small print is vital

As with any purchase, being aware of all the costs involved in your mortgage rate and house purchase is vital.

In some cases, the headline figure of a mortgage may look great but reading the small print could reveal extra costs. Some of the key questions you should ask before taking out a mortgage include:

  • Is there a product fee with the mortgage?
  • Will the rates automatically change after a few years?
  • Is the mortgage a fixed or variable rate?

Make sure you take all costs into account

When saving to buy a home, it is easy to become fixated on the amount you will need for your deposit. However, you should aim to factor in other costs as soon as possible in the process.

This is likely to include:

  • Legal fees
  • Surveys
  • Stamp duty for homes worth more than £125,000

Get your free online conveyancing quote today

Here at Residential Matters, our dedicated solicitors offer a free, fixed fee quote making budgeting for your move easy.

If you’d like advice on the legal process of buying a home, talk to our experts by calling 01282 695 400.

Or, you can get your conveyancing quote online.