First-time buyers could find cheaper mortgage deals by looking beyond the UK's biggest banks. Monthly checks of the mortgage market indicate that smaller building societies frequently offer some of the most competitive rates for those purchasing their first home.
In contrast, the largest lenders tend to dominate the home mover and remortgage markets. Beverley Building Society and Leeds Building Society, along with Lloyds Bank and Virgin Money, were among those offering the cheapest deals for first-time buyers in a recent analysis.
West Brom Building Society was noted for having the cheapest deals for certain loan-to-value ratios on two-year and three-year fixed-rates when checked on 23 July. Newcastle Building Society also features in best rate tables for first-time buyers, offering a strong 5% deposit mortgage with a five-year fixed rate.
Some lenders, such as Beverley Building Society and Furness Building Society, offer lower rates to those living within specific postcodes. Beverley Building Society, for example, offers better deals if a buyer lives within 50 miles of the Yorkshire town, including a market-leading rate for a two-year fix for first-time buyers with a 5% deposit.
When choosing a mortgage, it is important to consider the entire deal, including any fees, which can be as much as £2,000. These fees can make the overall cost of a seemingly cheaper deal higher than one with a slightly elevated rate.