Leeds Building Society's new Help to Buy mortgages mean you can fix your mortgage rate for a decade, with just a 5% deposit.
Leeds Building Society has announced four new Help to Buy equity mortgage deals, developed in conjunction with Barratt Developments, offering fixed rates for up to ten years
They also include periods of up to six months where the borrower won't be charged any interest at all!
Help to Buy
Help to Buy equity loan mortgages allow a buyer to lay down just 5% of the purchase price as a deposit, while the Government offers a loan of up to 20% of the value of the property. The remaining 75% of the price comes from the mortgage.
It's not the same as the Help to Buy: mortgage guarantee, in which buyers again place down 5% of the deposit, but the Government acts as a guarantor on the remaining value. Lenders are compensated for significant losses if the buyer defaults on payments and the property is repossessed.
There are certain rules by which a buyer using the scheme must abide by; to learn more about both parts of the Help to Buy scheme, read Help to Buy mortgages explained.
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What’s on offer?
The Society is offering the following rates in its new Help to Buy mortgages, which are available in England, Wales and Scotland.
- A 10-year fixed rate Help to Buy mortgage at 4.99%
- A 10-year fixed rate Help to Buy version of the Society’s Welcome Mortgage, which gives borrowers the choice of paying 0% interest for either the first three months or six months
- A five-year fixed rate Help to Buy version of the Welcome Mortgage, with the choice of paying 0% interest for either the first three months or six months
- A two-year fixed rate Help to Buy version of the Welcome Mortgage, paying 0% interest for the first three months
All of these are subject to a £199 booking fee, and the 10-year fixed rate deal at 4.99% will also require a £300 completion fee. Tapered early repayment charges also apply, which can be as high as 6% and as low as 2%, depending on what year of the fixed rate deal you are repaying in, and on which deal. A maximum of 10% capital repayments are allowed each year.
Here’s how the products with 0% periods break down, as well as the versions of the mortgages that don't come with 0% periods. The early repayment charges are applicable to the amount redeemed.
|
Fixed term |
0% period |
Rate for remainder |
Tapered early |
| Two years | - | 2.50% | 3/2% |
|
|
Three months |
2.88% |
3/2% |
| Five years | - | 3.90% | 5/5/4/3/2% |
|
|
Three months |
4.13% |
5/5/4/3/2% |
|
Six months |
4.40% |
5/5/4/3/2% | |
| 10 Years | - | 4.99% | 6/6/5/5/5/5/4/4/3/2% |
|
|
Three months |
5.16% |
6/6/5/5/5/5/4/4/3/2% |
|
Six months |
5.34% |
6/6/5/5/5/5/4/4/3/2% |
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How does this measure up to the rest of the market?
Leeds Building Society is offering the only ten-year fixed rate deal for Help to Buy that is currently available.
[SPOTLIGHT]Comparing Help to Buy equity mortgages can be a tricky task, due to the equity loan. As Leeds puts it, these mortgages are worth up to 95% of an 80% share of the property. Wrap your head around that one...
So let's take a look at what some of the other lenders taking part in the Help to Buy equity loan part of the scheme are currently offering.
Nationwide has a two-year deal at 2.94% and a five-year fixed rate at 3.84%, with no fees.
Skipton Building Society has a two-year fixed rate at 2.99% and a five-year fixed rate at 3.79%, both with no fee.
Barclays has a two-year and three-year fixed rate both at 3.19% and with no fees to pay.
Santander has a two-year fixed rate 3.24%, with no initial fee and a five-year fixed rate at 3.44%, again with no fee.
Royal Bank of Scotland and NatWest have two-year fixed rates at 3.39% and five-year fixed rates at 3.99%, with no fees.
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This article aims to give information, not advice. Always do your own research and/or seek out advice from a regulated broker, before acting on anything contained in this article.
Your home or property may be repossessed if you do not keep up repayments on your mortgage.
More on mortgages:
Help to Buy mortgages explained
Fixed rate mortgage interest rates on the rise
Mortgage Market Review: why finding a mortgage is set to get harder
Stamp Duty, estate agents, legal fees: why moving home costs £8,000