Property & Mortgages

Mortgage rates for first-time buyers in the UK at a six month low

UK mortgage

Lenders battle to attract new customers with six month low mortgage rates for first-time buyers

Mortgage rates for first-time buyers have fallen significantly over the past six months as lenders struggle to attract new customers.

It is time for first-time buyers to consider a property as two-year fixed deals have significantly dropped across the market. The average two-year fixed mortgage rate has fallen by 0.04 per cent, from 2.53 per cent in August 2018 to 2.49 per cent now, analysis from has found.

Moreover, despite the Bank of England base rate having increased from 0.5 per cent to 0.75 per cent in August last year, the amount some lenders charge to take out a two-year fixed-rate deal has also fallen from £1,105 in August 2018 to £1,029 now.

The comparison service firm reckons that strong competition from lenders to attract first-time buyers – who are seen as the “lifeblood” of the mortgage and property market – has pushed the overall rates on offer on two-year fixes down.

For borrowers with deposits of 20 per cent to 30 per cent, two-year fixed mortgage rates have typically increased since last August. But for borrowers with deposits of 5 per cent to 15 per cent – who are often first-time buyers – overall rates on two-year deals have dropped in the same period.

People with a 5 per cent deposit looking for a two-year fixed mortgage rate will find the typical rate on the market has rates fall by 0.54 per cent – from 3.95 per cent to 3.41 per cent.

Darren Cook, a finance expert at, described the rate falls as “fantastic news for prospective first-time buyers looking to get their foot on the property ladder”.

He added that there clearly seems to be a concerted drive by mortgage providers to try and secure the business of potential first-time buyers, who are the lifeblood of the mortgage and property markets and it is encouraging to see rates decrease as a result of some healthy competition. Building societies in particular appear to be focusing attention on attracting borrowers with smaller deposits.

He said 37 per cent of two-year fixed products that only require a 5 per cent deposit are available through building societies, compared with just 16 per cent of all available products that require a deposit of 40 per cent or more.

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