A MAJOR housebuilder is offering to pay first-time buyers’ mortgages for ten months.
But buyers will have to be quick as the offer ends in weeks.
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First-time buyers who reserve a new Persimmon home by January 31 can benefit from the company covering up to 10 of their monthly mortgage payments.
The move is intended to free up each customer’s cash to help with the cost of living.
The mortgage-free incentive is capped at 5% of the agreed sale price.
For example, if your new home costs £245,000, Persimmon will pay up to £1,225 in your mortgage payments for 10 consecutive months.
This equates to an annual saving of £12,250.
The 5% discount is the maximum that a developer is allowed to contribute to a customer securing a mortgage – so if your house costs more than the average, it may not cover your whole monthly bill.
But be aware that the offer is available on selected developments and plots only.
The scheme is not open to those who purchase a property with a buy-to-let mortgage or those whose property was purchased using the First Homes Scheme or other discount from market value schemes.
Sonia Da Costa, chief customer experience officer at Persimmon, said: “We know that the volatile mortgage market combined with the cost of living has left many families concerned about the affordability of a new home.
“The chance to move into a new home mortgage free for up to 10 months will give potential buyers some breathing space and ensure the path to a new Persimmon home provides real help with the cost of living.”
Nick Morrey, technical director at mortgage broker Coreco said: ” Anything that helps buyers with the cost of living is to be welcomed.
“It could save buyers thousands of pounds whilst heating bills and the cost of living are so high.”
In a separate offer, the house-builder is supporting those selling their existing property with a 105% part-exchange.
This allows customers to save money on fees and benefit from an extra 5% on top of their valuation.
If you’re eligible for part exchange, Persimmon will organise the sale of your existing home from start to finish for you.
It will agree on a fair and realistic price for your house based on independent valuations.
And once you’re happy with the part exchange offer the house-builder will appoint estate agents to market your property on our behalf.
Sellers can then reserve their new Persimmon home, safe in the knowledge that they have agreed a sale on their current property.
It comes as Persimmon announced that it saw 2% more home completions in 2022 compared to the previous year.
New home completions rose from 14,551 in 2021 to 14,868 in 2022.
A mortgage price war has also begun between lenders as fixed deals disappear faster than ever before.
Falling costs mean lenders are battling it out to offer borrowers cheaper fixed mortgage rates.
It comes as the lending sector continues to recover after the previous government’s disastrous mini-Budget which caused mortgage rates to shoot up to a 14-year high in September.
Right now, both two and five-year fixed rates fell month-on-month for the second month running, down to 5.79% and 5.63% respectively – down from 6.01% and 5.8% respectively last month.
We’ve explained how to choose the best mortgage deal below.
How do I go about choosing the best mortgage deal?
There are lots of factors to consider when searching for the best mortgage deals.
The amount you can borrow and interest rate are important factors but you should also consider the type of mortgage.
Do you want the certainty of a fixed-rate mortgage or the flexibility of a tracker that could get cheaper rates and typically doesn’t have exit fees, for example?
There are mortgage calculators online that will let you compare the monthly cost of a mortgage based on the interest rate and any fees.
A lender or mortgage broker will be able to offer advice on the best type of mortgage deal to meet your needs.
Shop around for the best mortgage deals rather than opting for the first bank you see.
Remember a bank or building society will only offer its own options which limits your choice.
You can also use a comparison website to find deals across the market based on your level of deposit and whether you want a fixed or variable rate.
A comparison website will usually let you search for all types of home loans such as for first-time buyers or the best buy-to-let mortgage deals.
This will give you an indication of what is on offer but you will need to do the application yourself.
Some lenders may not be on comparison websites so it is worth searching directly online as well.
Alternatively, a mortgage broker can help search the market more widely and find the most suitable deals for you.
Is it better to get a mortgage from a bank or a broker?
A bank may offer the best mortgage deal for you but shop around before you commit.
This is because a bank adviser will only offer their own products.
Limiting yourself to one bank’s products could mean you end up paying more than you needed to or you may not even meet their criteria.
Alternatively, a broker can use their market knowledge to help decide which type of mortgage and lender is best for you.
This could be of benefit if you are self-employed or have a poor credit rating as they may have more experience dealing with these sorts of applications.
It saves time on doing multiple applications, as you just tell your broker your income and expenses and they will work out the best mortgage you can get.
They can usually help with your application and will fight your corner to get you approved.
A broker will be able to advise on a range of products from different lenders, but these may also be limited to a panel so you should check if they are tied or work across the whole market.
There may, however, be extra fees when using a broker.
A mortgage may have an application or product fee but a bank adviser won’t charge anything on top of that.
In contrast, a mortgage broker may have their own fees for their advice.
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