First Direct Fixed Rate Mortgages

by Mark Johnston

Leeds based First Direct are a pioneering telephone and internet based bank owned by the HSBC group. They are open for business 24 hours a day 7 days a week. They offer a full range of finance products including some great mortgage deals that should suit most borrowers needs.

First Directs best deal at the moment is a 2 year fixed rate mortgage at 3.59%. Whilst many providers are offering market leading rates they tend to come with high booking and arrangement fees, not First Direct. This 2 year fixed rate mortgage has no arrangement fee and only a £99 booking fee which allows it to come in at a competitive 3.8% APR. Maximum loan to value is 75% and the rate reverts to the Standard Variable Rate (SVR) of 3.69% after 2 years.

For those borrowers will a little more deposit the bank is offering a 3.09% rate for those with a 35% deposit as the maximum loan to value (LTV) is 65%. Although this seems a great offer borrowers should be cautious, the booking fee of £499 and the arrangement fee of £499 result in the APR still being 3.8%. This may attract some people who would prefer to pay a fee and have slightly reduced monthly fees.

First Direct are also offering a longer fixed rate period of up to 5 years. This is available in a number of options. The first is a 5 year fixed rate mortgage with a LTV of 85% at 5.79%. The booking and arrange fee is £249 each so fees come to £998 in total. This gives this 5 year mortgage a APR of 4.7% to help you compare to other mortgage products First Direct are offering.

The second 5 year fixed rate mortgage is a standard LTV of 75% and is available in two options depending on what up front fee you are prepared to pay. The 4.99% mortgage (APR 4.3%) has no arrangement fees and a £249 booking fee whilst the 4.69% version (APR 4.2%) has a £249 booking fee and a £249 arrangement fee.

Lastly First Direct have a 65% LTV mortgage which seems to be a slightly better  deal at 4.29 (APR 4.1%. But the initial bookings fees are higher than some of their other offers at £499 for the arrangement fee and £499 for the booking fee.

All First Directs fixed rate mortgages revert back to their standard variable rate of 3.69%. If you are able to repay the whole of your mortgage before the fixed rate period First Direct charge a fee. They currently charge 3% of the original mortgage during the first year and 2% for any subsequent years whilst ever you are on a fixed rate. If you choose to repay your whole mortgage once a fixed rate has ended and your mortgage has reverted to the variable rate then no charge will be applied.

Although they do not offer as many options as their bigger brother HSBC they certainly are looking like contenders on the UK mortgage market, keep a look

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