Leeds BSJan 17 2018

Leeds Building Society offers help-to-buy cashback deals

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Leeds Building Society offers help-to-buy cashback deals

Leeds Building Society (LBS) has added two mortgages with £1,000 cashback to its Help to Buy (HTB) range.

The Society has launched a two-year fixed-rate mortgage at 2.04 per cent; and a five-year fixed-rate mortgage at 2.34 per cent.

Both are available at up to 75 per cent loan to value (LTV) and come with a free standard valuation.

LBS’s HTB mortgages can be obtained only through intermediaries and can be used for property purchase or remortgage.

Help to Buy was launched by the government in 2013, offering first-time buyers the chance to benefit from help with their home purchase.

There are different types of schemes available, including an Isa, a shared ownership scheme and an equity loan scheme.

According to LBS, the Help to Buy market is set to grow as people who have bought their homes through the scheme could look to remortgage in order to reduce their payments.

The Help to Buy: Equity Loan scheme reaches its fifth anniversary in 2018, and borrowers facing additional interest payments on the government’s 20 per cent loan could be looking to pay off some of the debt.

The Society previously said borrowers could buy out the government share in full or in part, via a process known as staircasing.

After the Bank of England's decision to raise the interest rate on 2 November, borrowers face making higher repayments on their debt.

Growth in salaries and equity in their homes during the past five years mean that many may want to review their arrangements.

Provider view:

Jaedon Green, director of product and distribution at Leeds Building Society, said: “These two latest deals offer the highest cashback available on a Help to Buy mortgage.

“We’re constantly refining and improving our Help to Buy offering in response to borrower and broker feedback and have worked hard to make our proposition as simple and straightforward as we can.

“As it reaches its fifth anniversary this year, the scheme’s first buyers will have to start paying interest on the government equity loan taken out in 2013.

“This is likely to focus minds on remortgage options, including whether to buy out the Government’s stake from your home, whether wholly or in part.

“We were the first lender to accept Help to Buy remortgage applications and expect to see growing demand in this market as the scheme’s initial purchasers reach the end of their current deals.”

 

Adviser view:

Michelle Lawson, director at Lawson Financial, said: "It’s always good to see new products and response to Help to Buy. It is great that there is support for the scheme as I am on Help to Buy South panel, so this is giving more choice to buyers.

"Also, the first borrowers will be looking to possibly remortgage now while remaining on the scheme, so good options there as well."

Charges:

£999 product fee

Verdict:

This offering from Leeds Building Society will be attractive to those who have been mulling over their remortgage plans. Also, despite government plans to abolish stamp duty on the first £300,000 of any property, the situation for first-time buyers is still far from smooth sailing, so more products will be welcome.