First Direct slashes rates on repayment mortgages

First Direct slashes rates on repayment mortgages

First Direct has cut rates on its repayment mortgages by up to 0.10 of a percentage point.

As part of the new offering, borrowers can choose two-year fixes at 1.24 per cent up to 80 per cent loan-to-value (LTV) and 1.34 per cent up to 85 per cent LTV.

Both products come with a fee of £1,450.

Article continues after advert

Two-year ‘fee saver’ fixes, which have no booking fee, no arrangement fee and no standard valuation fee, include products at 1.74 per cent up to 80 per cent LTV and 2.39 per cent up to 90 per cent LTV.

Standard five-year fixes include rates of 1.69 per cent up to 60 per cent LTV and 2.14 per cent up to 85 per cent LTV, with a £1,450 fee.

Fee saver five-year options are available at 2.14 per cent up to 75 per cent LTV and 2.29 per cent up to 80 per cent LTV.

The new product offering is not available via intermediaries.

The latest Bank of England Credit Conditions Survey found that the home-owners remortgaging market is growing. The drive to increase market share has led to intense competition between lenders, even though funding costs have started to edge up.

However, on the buy-to-let remortgage side, activity which had been growing until very recently is showing signs of slowing down.

According to the Council of Mortgage Lenders over the last two months the number of loans for remortgage on a 12 month rolling basis fell relative to the 12 months preceding it.

The tax changes that came into effect from April 2017 were likely to dampen landlords’ appetite and ability to re-leverage their portfolios - a factor that could be putting off some landlords from remortgaging.

Provider view:

Nick Harrison, head of products, said: “We’ve cut the rates on our range of two and five year fixed rate mortgages, offering competitive rates on products to customers who want the certainty of a fixed repayment. At first direct, we aim to offer a wide choice of competitive products to suit customers’ needs.”

 Adviser view:

Tom Oliver, financial planner at Lamb & Associates Lifestyle, said: “These rates are quite competitive but there are other providers on the market with equally competitive rates and zero fees, such as Platform and Metro Bank who both offer 2.24 at 80 per cent LTV on a five year fixed.


Standard two and five-year fixes have a fee of £1,450. Two-year ‘fee saver’ have no booking or arrangement fee.


First Direct’s product is one of several in the market with competitive rates, trying to match the growth being seen in home-owners remortgaging. A sticking point for advisers, however, will be that the products are not available via intermediaries.