Yorkshire Building Society launches two new best-buy mortgages for first-time buyers
Only those with a Help To Buy ISA will be able to take advantage of these two-year fixed-rate deals with super low rates
YORKSHIRE Building Society has launched a new range of super-low mortgage deals - but you'll only be able to get them if you've got a Help To Buy ISA.
YBS has launched four new deals for first-time buyers and two of them are the best deals out there.
There are two two-year deals and two five-year offers but not all of them will leave you with more cash in your wallet.
All you need is either a five per cent or 10 per cent deposit, although you'll need to pass all the correct credit checks too.
You'll have to use the cash from your Help To Buy ISA though, which is the government scheme that gives first time buyers a 25 per cent bonus on top of their savings up to £12,000.
So unfortunately, if your stumping up the cash from an ordinary savings account then you won't be able to get the deals.
The four deals are:
- 1.72 per cent, two-year fixed rate mortgage with a 10 per cent deposit
- 2.39 per cent, five-year fixed rate mortgage with a 10 per cent deposit
- 3.09 per cent, two-year fixed rate mortgage with a 5 per cent deposit
- 3.75 per cent five-year fixed rate mortgage with a 5 per cent deposit
According to Charlotte Nelson at , both of the two-year fixed rate deals are the lowest offers available.
Your next best bet with a five percent deposit would be with challenger bank, Atom, who offer 3.29 per cent interest but there are no fees.
If you've scraped the funds together for a 10 per cent deposit and have an ordinary savings account, the best deal you can get is from TSB who offer 1.84 per cent but there's a £995 fee.
Looking to lock in to a five-year deal? You're better off steering clear of the latest deals from YBS because you'll get more for your money elsewhere.
Atom bank and First Direct offer the same rates as YBS on a deal with a 10 per cent deposit, plus Atom don't charge any fees.
Potential homeowners in this position should head to Barclays who offer 2.34 per cent on a similar deal but you'll need to fork out £999 in extra fees.
Again, YBS can be beaten by Atom bank on a five-year fixed-rate deal if you're putting down a five per cent deposit as it offers 3.59 per cent and zero fees.
Charlotte Nelson from MoneyFacts explains: "These latest Help to Buy ISA exclusive mortgages from Yorkshire Building Society are highly competitive, with all sitting comfortably towards the top of their relevant sectors.
What's the difference between a two-year or a five-year deal?
WHEN it comes to mortgages, there's a lot to take in.
Andrew Hagger from MoneyComms weighs up the pros and cons of a fixed-term mortgage to help you decide what one will work for you.
"With a five year fix you have the peace of mind that your interest rate and monthly repayments won't change for 60 months, even if the Bank of England puts rates up.
"This is a great help with budgeting.
"Also most fixed rate mortgages charge a product fee - typically £500 to £1,000 - so it's better to only have to pay this once every five years rather than every two years.
"The slight downside with a five year deal is that you are liable to pay an early repayment charge if you exit the loan early - and rates come down.
"It's not applicable if you move home, but say for example, if you split from a relationship and had to sell before the end of the term, then you'll have to fork out for the fee."
"Both of the two-year fixed rate options enter the market as the lowest deal available and are a great cost-effective option for borrowers.
"With other deals on the market having no fee and even cashback incentives. It will be wise for borrowers who have saved into a Help to Buy ISA to assess the market before jumping in feet first."
Don't have a Help To Buy ISA? Don't worry because the building society is also offering first-time buyers £1,000 cashback when they take out a selected mortgage with them.
The Post Office is also offering a 0 per cent deposit mortgage deal for first time buyers - but you'll need to put your parents house down as a safety net.
Saving for a deposit is no mean feat, especially when latest government figures suggest they'll have to fork out nearly £50,000 for one.
One young couple lived on a diet of beans and noodles while they saved to buy their first home for £220,000 all before they turned 21.
And Ethan Bragginton and his girlfriend Aimee managed to do it alone when he was just 18 and she was 20 - but he had to move away from London to be able to afford it.
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