by Mark Johnston
Chelsea Building Society launches New Mortgage Rate for First Time Buyers!
It seems that the first time buyer market is once again booming…..
Thanks largely to the Government’s Funding for Lending Scheme, the number of first time buyers on the market rose annually by 45 per cent in July this year, with a total of 26,100 transactions in the month.
According to LSL Property Services, this is a rise of 8,100 from a year ago and the highest number of sales since November 2007.
The number of mortgages available for borrowers with smaller deposits has grown, giving first time buyers additional options.
It seems that lenders have become fiercely competitive as they try to attract more borrowers.
Chelsea Building Society has launched a market leading two year fixed rate mortgage for first time buyers.
Borrowers with a 10 per cent deposit can apply for the deal, which comes with a fixed rate of 3.54 per cent for two years and a one off fee of £1,545.
Industry experts state that the Chelsea Building Society has a good track record in the past for launching best buy mortgages. However, as is often the case with these kinds of deals, a low rate can be offset by high fees.
The new offer from Chelsea shoves HSBC from the top spot for two year fixed rates on 90 per cent loan to value (LTV) deals.
The promise made was that between the 2nd of September and the 3rd of November, the lender pledged to be ‘first for first time buyers’, by matching or beating high street rival that attempt to outdo its top rates.
Therefore it appears that the Chelsea building society’s new deal had made a mockery of the price promise the HSBC pledged.
However, it is worth noting that the price promise came with an important catch, the HSBC would only beat or match rates on offer from Barclays, Woolwich, Halifax, Lloyds TSB, Nationwide, NatWest, Royal Bank of Scotland and Santander, as these particular these providers represent 81 per cent of the UK mortgage market.
So it would seem then that the Chelsea Building Society is part of the 19 per cent of providers HSBC’s guarantee does not cover.
This new deal launched by the building society suggests it is clear to see that building societies are punching above their weight and giving the big banks a run for their money.
Even though these deals are good news for first time buyers the fact is property prices are rising steadily and therefore there is the possibility that first time buyers will be priced out of the housing market anyway!
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