Fixed rates to lure first-time buyers
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.TWO new schemes to encourage buyers into the property market are being launched by Nationwide and Cheltenham & Gloucester building societies, writes Neasa MacErlean.
Both are offering mortgage rates of around 4 per cent - about half the going variable rate.
Under the Cheltenham & Gloucester offer first-time buyers can get a 3.99 per cent loan fixed until the end of February next year. Borrowers will then go on to the society's variable rate - currently 7.99 per cent - for the next two years.
Nationwide is offering a 4.25 per cent two-year fixed loan on 1,500 of its repossessed properties. These are located throughout England and Wales and most are selling for between pounds 15,000 and pounds 50,000. They are all properties which the society has found difficult to sell but they are, according to the society, going at full market value.
Both schemes require a 10 per cent deposit. Nationwide also insists that borrowers take out a mortgage payment cover policy, but the society will pay the costs of the valuation.
Although the C&G rate is fixed only for one year, it is still effectively a three-year mortgage. The society will claim back all the subsidy it has made to the borrower in the first year if the mortgage is redeemed before the end of three years.
'We cannot afford to lend for 3.99 per cent unless we retain the borrower,' said a spokeswoman.
Despite the requirements for a 10 per cent deposit, C&G believes that many first-time buyers will be able to afford the deal.
The maximum loan is pounds 70,000 and the society has found that, on average, first time buyers have 15 per cent deposits. The offer is expected to last for about a month, when it will be replaced by another first-time buyer product.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments