Get up to £1,000 handed back.
Halifax/Bank of Scotland is to refund two months of interest payments on its mortgages to homebuyers when they take out a qualifying mortgage.
Up to £1,000 will be handed back as part of the promotion which runs until 6th October. The deal is open to those already on the property ladder as well as first-time buyers.
The interest payment is available on the lenders’ main mortgage range, Help to Buy (mortgage guarantee) deals, and new build mortgages. However, it’s not available on shared equity, shares ownership or buy-to-let mortgages, or applications made through intermediaries.
Are the mortgages any good?
Getting up to £1,000 handed back just after moving house sounds lovely as it can cost a small fortune. However it’s a waste of time signing up for a deal for the sake of that £1,000 if you end up shelling out far more on the mortgage in the long run.
So let’s take a look at a handful of Halifax/Bank of Scotland mortgages and how they compare. I’m going to focus on mortgages available to people with deposits of 10% or 25%.
Two-year fixed rate mortgages
The lowest rate you can get from Halifax/Bank of Scotland on a two-year deal at 75% loan-to-value (so requiring a 25% deposit) is 2.14%, though this comes with a whopping £1,995 fee. You can cut that fee down to £995, though the rate will jump to 2.64%.
You can get a rate of just 1.94% with Chelsea Building Society, though the fee is still significant at £1,545. And if you want a fee of less than £1,000, you can get a rate of 1.98% from the Post Office, with a £995 fee.
Moving onto 90% loan-to-value (so just a 10% deposit required this time) the best rate from Halifax/Bank of Scotland is 4.54%, with a £995 fee. This can be comfortably beaten though by Penrith Building Society’s deal at 3.25% with a £500 fee.
Five-year fixed rate mortgages
If you want to fix your mortgage rate for a longer period, the lowest rate you can get with a 25% deposit from Halifax/Bank of Scotland is 3.98%, with a £995 fee.
Looking elsewhere, the lowest rate around comes from Tesco Bank at 3.29%, though the fee is a significant £1,495. Chelsea Building Society has a mortgage with the same interest rate, though the fee is even bigger at £1,675. If you want to pay less than £1,000 in fees then Yorkshire Building Society is your best bet, with a rate of 3.34% and a fee of £975.
If you only have a 10% deposit, the lowest rate from Halifax/Bank of Scotland stands at 5.29%, again with a £995 fee.
You can head to Chelsea Building Society and get a lower rate of 4.24%, albeit with a fee of £1,545. For a cheaper fee, there's Yorkshire Building Society, which boasts an interest rate of 4.29% with a fee of £975.
Do your research!
What this has hopefully demonstrated is that, while promotions like this can look appealing, chances are you will be better off if you stick to shopping around for the best rate and fee combination for your circumstances. If that deal happens to come with some wonderful extras, like cashback or refunded interest payments for a couple of months, then that’s just an added bonus.
You can compare the mortgages available to you with the lovemoney.com mortgage centre.
More on mortgages:
The best Help to Buy mortgages