The range includes five-year and 10-year fix and flex products
TSB has launched a new product range of mortgages specifically aimed at first-time buyers to help them get on the property ladder.
The mortgages will enable first-time buyers to automatically move onto a follow-on tracker rate that is lower than the current TSB Homeowner Variable Rate after the fixed period ends. This means that the total amount payable (TAP) during the mortgage term will be reduced.
The first-time buyer product range interest rates will start from 1.34%. The range includes fixed two-year, five-year and 10-year products, as well as five-year and 10-year fix and flex products.
Following the end of the fixed term, customers will move onto a lower follow-on tracker rate of 2.49% above base rate and currently 2.59%, instead of the current TSB Homeowner Variable Rate of 3.59%.
This means that all first-time buyer products will result in a lower TAP over the term of the mortgage compared to TSB’s home mover products if the customer remained in the tracker – so customers will pay back less as they repay their mortgage.
As a result of the lower follow-on tracker rate, first-time buyer applications will be stressed at a lower rate of 5.6% instead of 6.6%. This will help more first-time buyers to be able to buy the home they want, whilst ensuring doing so remains affordable for them over the full life of their mortgage.
The product range also includes a new five-year fixed stepped down product just for first-time buyers. The stepped down rates will start from 2.54% (depending on Loan to Value) and will reduce four times over five years so the customer will see a decrease in their mortgage payments.
Nick Smith, TSB’s head of mortgages, said: We know that buying your first home can be difficult and we want to do more to help first-time buyers get on the property ladder. That’s why we’re introducing this new suite of mortgage products giving customers money confidence to search for their first home.
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