The Bank of England has revealed figures that show new homeowners who secured a new mortgage can now benefit from the lowest interest rates in 6 years! Fixed-rate home loans have fallen to their cheapest level for six years. The Co-Operative Bank, Northern Rock, and the Chelsea Building Society all revealed competitive deals recently.

In February 2010, on average a 2 year fixed-rate deal fell to 3.88%, the lowest rate since summer 2003. In conjunction with this fall there was also a decrease in the average cost of a five year fixed rate mortgage, falling to 5.49%, a change of 0.07% on the previous month.

Due to lenders competing to attract good-quality borrowers, interest rates have fallen. This should encourage existing customers to remortgage their property.

New UK Homeowners and First Time Buyers

The Mortgage Works is an innovative new range of guarantor home loans from part of the Nationwide Building Society group.

There are schemes that relieve some stress on first time buyers and new homeowners. One of these is to allow parents or relatives to be financial responsible for a proportion of a borrower’s mortgage. This will remove the risk of backing the entire loan. It requires the applicant to be able to afford at least 70% of the repayments on there loan, while the guarantor must be able to make up the remaining 30%. There is also a 10% cushion.

A different approach has been taken by Halifax, with their “Lend a Hand” deal, giving first time buyers a stronger chance of getting their foot in the door. It means that a buyer can now borrow up to 95% of the value of the property. However, this must be backed by a parent or relatives savings. The demand for mortgages in recent times has meant that deals like this are becoming a more common reality for banks and building societies, providing a different kind of service for borrowers.

Small deposits such as the schemes above have allowed first time buyers a choice in how they approach trying to obtain a mortgage.

A first time buyer may take another approach, which could be a shared equity scheme. This can help when buying an apartment or house. Property developments like The Hub in Manchester provides such a scheme, where you can buy studios or apartments without paying the full amount.

Want to find out more about Manchester apartments for sale, then contact Sinead Jones at The Hub Manchester for more information.

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