first direct adds to first-time buyer competition

The retail banking division of HSBC has reduced the rates on more than 30 of its fixed mortgages.

first direct has added competition to the first-time buyer market by reducing its five year fixed rate that can finance up to 95% of your home.

The mortgage now charges a rate of 4.99%, doesn’t include any product fees, and offers a free valuation.

“We have reduced the rate of borrowing across some of our higher loan-to-value (LTV) products, which is great news for first-time buyers who might be looking to buy a property with a smaller deposit,” said Carl Watchorn, Head of Mortgages at first direct.

While it’s the first time the lender has offered a sub 5% fixed rate in this LTV bracket since September, there are already similar mortgages on the market.

Newcastle BS currently offers the lowest five-year fixed rate for those with a minimum deposit of 5%. At 4.90%, it charges £999 for its product fees and doesn’t come with any incentives.

Meanwhile, if you’re looking for one of the cheapest deals on overall cost consider Cumberland BS. Its five year fixed deal is a Moneyfacts Best Buy option and charges a rate of 4.93%.

It also comes with the same incentives as first direct, a free valuation and no additional product fees.

Otherwise, Nationwide BS matches first direct’s rate of 4.99% and employs a cashback incentive structure for energy-efficient homes.

In essence, homes with an Energy Performance Certificate (EPC) between 86 and 91 earn £250 cashback while those rated 92 or higher earn £500 cashback.

This deal can be examined in more detail below and can be compared to other offers on our chart.

first direct made reductions to more than 15 of its fixed rate mortgages today.

Among these reductions, it also lowered the rate on a selection of its mortgages which need a minimum deposit of 10%.

Make sure to use the Moneyfactscompare.co.uk charts to compare these deals in more detail.