Mortgage watch: LBS drops rates for FTBs

Phil Coombes, head of intermediary sales for Leeds Building Society, said the need to help potential homeowners led the lender to cut its rate by 0.70 percentage points to 4.99 per cent.

He said: “We are all well aware of the difficulties facing first-time buyers. They can often struggle to meet the full asking price or their income is insufficient to support a full mortgage.

“Our two-year fixed rate is ideal for clients who have saved for a deposit but cannot buy a property in their own right. There is no doubt that this product will prove attractive to those clients who are ready to take the first step into home ownership.”

Key features of the LBS Shared Ownership two-year, fixed-rate mortgage

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· 4.99 per cent fixed up to and including 31 March 2015

· Available up to 95 per cent of the borrowers share (maximum 75 per cent overall loan-to-value)

· No higher lending charge

· Free standard valuation up to £335

· £200 completion fee

· £199 booking fee

· Tapered early repayment charges of 3 per cent of the amount redeemed in year one and 2 per cent in year two.

Adviser view

Paul Good, mortgage adviser for Preston Farm-based Joslin Rhodes, said: “It is great having this sort of rate, and it will help first-time buyers but the building associations need to be on board as well when it comes to shared ownership.”