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Mortgage incentive schemes for first time buyers

Incentivised mortgages are a great way for first time buyers to step onto the first rung of the property ladder

Mortgage incentive schemes for first time buyers

Although mortgage applications have become a veritable minefield for first time buyers in the last few years due to the recession, lenders are now beginning to re-enter the market with mortgage incentives specifically for first time buyers.

Cash Rewards

For those still trying to save for a house deposit buyers can now receive significant aid towards their goal with cash bonuses. Major UK mortgage lenders are beginning to offer lump sums to first time buyers who put money into savings accounts over a set time period whilst taking out a mortgage at the same time.

“Save-to-buy” mortgage incentive schemes offering cash back rewards in return for meeting savings targets offer a refreshing addition to the first time buyer market. In many ways the system appears to be turning back the clock 20 years to a time when first time buyers had to prove they could save money on a regular basis and therefore afford their mortgage commitment.



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Low Deposit Mortgages

A small handful of lenders have also returned with mortgages of up to 95 per cent, however first time buyers will be hit by increased interest rates as new regulatory conditions ensure banks are required to set aside up to six times more capital for low deposit mortgages.

As the Mortgage Guarantee aspect of the Help to Buy Scheme ended in December 2016, low deposit mortgages within this scheme are no longer available. Instead, the Help to Buy equity loan, Help to Buy ISA and Lifetime ISAs have been rolled out by the government and are intended to help support those looking to get on the property ladder with a mortgage, and save for a deposit on a home.

First Time Buyer Mortgages

In order to revive the housing market, lenders are becoming increasingly innovative with their mortgage deals to first time buyers. Their incentives include loans based on how much rent you’ve previously paid for a property, mortgages for parents with a new-born child or child on the way and shared ownership mortgages.

Below is a list of first time buyer mortgages available on the market subject to eligibility:

  • Graduate mortgages

  • Shared ownership mortgages

  • Key Worker mortgages

  • Shared equity mortgages

  • Professional mortgages

  • Friends and Family mortgages

  • Guarantor mortgages

  • Poor Credit mortgages

  • Cashback mortgages

Specialist Advice

It is important to seek specialist mortgage advice tailored for a first time buyer. Any reputable mortgage advisor will have a deeper understanding of the first time buyer market and will inform you of the best deals and incentive schemes to suit your financial requirements.

The first time buyer mortgage market is fiercely competitive again so be sure to liaise with a lender that informs you of all possible discounts and incentives that can help accelerate the moving process by saving you money or providing you with additional funds for your deposit.

Updated January 2017

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