Mortgages designed for first time buyers
Some lenders offer mortgages, which they call 'first time buyer mortgages'. These are tailored to suit the needs of the average first time buyer and include features such as a low or no deposit required. First time buyer mortgages may also be named as follows, or feature elements of the following mortgages:
100% Mortgage
You pay no deposit and you receive 100% of the value of your new home
from your mortgage lender.
Graduate mortgage
The loan to value
is usually around 102-103% but some lenders are prepared to lend up
to 125%. The additional loan is often used to furnish the graduates
first home.
Family offset
mortgage
This type of mortgage allows a family member to help the first time
buyers mortgage repayments using their savings.
Interest only
mortgage
You only repay the interest on the mortgage every month and you invest
your savings over the course of the mortgage term in order to repay
the mortgage capital at the end.
Low start
mortgage
A low start mortgage combines the interest only mortgage with a repayment
mortgage. It allows you to only repay interest during the early
years of the mortgage and start repaying the mortgage capital later
in the term when you are more able to afford it.
Right
to buy mortgage
As a first time buyer, you may be in the position to purchase your home
from the council using a right to buy mortgage. Right to buy mortgages
usually have large discount rates associated with them.
Of course if you are a first time buyer with a high income and a reasonable deposit there are a wider range of mortgages available to you. For instance you may want to take advantage of a current account mortgage to make your savings, income and mortgage work together in a more logical way. See all other mortgage types for more.