Lloyds TSB explains its first-time buyer mortgage

22-May-2009

Lloyds TSB has launched a new mortgage that is specifically for first-time buyers in the UK.

Describing how it works using the example of a £100,000 property, the bank said there is a 95 per cent loan-to-value mortgage offered by Lloyds at a three-year fixed rate of 4.39 per cent.

The buyer shells out £5,000 as a deposit, while £20,000 is put down by the purchasers' parents, grandparents or friends into a Lloyds Lend a Hand savings account, earning a fixed rate of 3.5 per cent for 42 months.

With any priced property, the contribution by the parents and/or others, as well as the buyer themselves, must equal 25 per cent of the property's purchase price - and the first-time buyer must provide at least five per cent of that.

Stephen Noakes, commercial director of mortgages at Lloyds Banking Group, said: "First-time buyers are essential to returning the housing market back to good health because every first-time buyer helps, on average, four other households move."

He added that Lloyds TSB is the largest mortgage lender in the UK and it is committed to finding "innovative ways to lower the first rung" of the housing ladder to make it within reach of a larger number of people.

Other providers to have launched new first-time buyer mortgages in recent weeks include Abbey and Co-Operative Bank.

FirstRungNow.com - how to buy a house, from finding your first flat or first house, first time buyer mortgages, shared ownership, buying with friends, gifted deposit, part buy part rent - all a first time buyer could possibly need.

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