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Help to Buy 2 mortgage details revealed

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08/10/2013
Two lenders have released details of the mortgages they are offering linked to the new government scheme.

Royal Bank of Scotland/NatWest and Halifax have unveiled details of the mortgages rates they are making available for the second phase of the government’s Help to Buy scheme.

RBS/NatWest offers a two-year fixed rate deal charged at 4.99% and a five-year fix at 5.49%, available up to 95% loan to value (LTV). These deals, available on the phone and in branches, have no arrangement fees.

From this Friday, Halifax will offer a two-year fixed rate charged at 5.19%, available up to 95% LTV. This deal, available through Halifax and Bank of Scotland branches and via advisers, comes with a £995 arrangement fee. The lender said it will offer more deals in due course.

RBS/NatWest will extend its opening hours at 740 branches for the next two weeks to cope with expected demand. It said that it expects to help 25,500 first-time and next time buyers using the scheme over three years.

There are already 44 mortgage products on offer up to 95% LTV according to Moneyfacts, but this figure includes guarantor and regionally-restricted mortgages.

These include a Yorkshire Bank three-year fix at 5.49% while Leeds Building Society currently offers a five-year 95% LTV product at 5.39%, although this product comes with a £999 fee.

London & Country’s David Hollingworth said the RBS products were competitive priced:

“The RBS/NatWest rates pitch in below and around where other lenders have priced mortgages at.

“Getting below 5% is a good barrier to break. The two-year looks very good, compared to something like Newcastle Building Society’s 5.95% mortgage you’re almost knocking a percentage point off the rate.

“It’s significant that NatWest is coming in and improving rates on offer. We needed Help to Buy to be bringing more choice to the market and NatWest has been priced competitively for the first part of the scheme too.”

Ray Boulger, senior technical manager at John Charcol, told Mortgage Solutions:

“I think these are pretty good rates, I was expecting low 5%. The two-year product looks a good bet, especially as the revert-to rate at RBS is 4%, assuming the SVR doesn’t go up in that time.”

Lloyd Cochrane, head of mortgages at RBS and NatWest, said:

“We’ve had lots of interest in Help to Buy mortgage guarantee already, it’s clear that for many of our customers this scheme will make the difference and enable them to buy that next property.

“I bought my first home with a 95% mortgage, so I understand how hard it can be to save for a large deposit. This scheme will make that challenge to pull together a deposit a little bit easier. From today customers can visit any of our 2,000 branches or call us to find out how we can help them through the scheme.”

HSBC today also announced it would be offering Help to Buy mortgages through its branches later this year. Virgin Money and Aldermore have also confirmed plans to launch Help to Buy products in the coming months.

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