Pete Marshall, commercial director of MoneyExpert.com, said: “This means yet another major lender is recognising that the mortgage market has changed massively and that with soaring house prices first-time buyers need a helping hand onto the property ladder.
“There are already over 150 different fixed rate 100 per cent deals available and the average rate of those is around 6.47 per cent. The Abbey deal is competitive, but its fee-free version is not the most competitive at 6.99 per cent, although for those who can’t afford to pay an arrangement fee it will look attractive.
“If you can fork out up to £995 or go through a broker, however, the top deal of 6.35 per cent is much more competitive and will appeal to many. Crucially there is also no higher lending charge.
“Affordability is the buzz word in the mortgage market and that’s never truer than for 100 per cent mortgages. Lenders take each customer as they come and will weigh up their ability to pay repayments before committing to a deal; so first time buyers shouldn’t necessarily expect to get the headline rate."
