A&L tempts first-time buyers with a 15% deposit

Alliance & Leicester (A&L) has launched a new mortgage aimed at first-time buyers with a 15% deposit.

The three-year fix, which is fee free, comes with a maximum loan-to-value ratio of 85%, an interest rate of 5.99%, a maximum loan size of £250,000 and a free valuation.

Latest figures from the Council of Mortgage Lenders (CML) show first-time buyer purchases at a mere 12,500 in March and A&L estimates that 1.8 million potential first-time buyers, with a suitably sized deposit, are waiting in the wings.

In addition to the A&L mortgage offer, first-time buyers can currently benefit from the lowest debt servicing costs since 2004, with monthly interest payments equating to an average 15.1% of income, according to the CML.

Meanwhile, Abbey, which is related to A&L via the Santander group, has announced that it is increasing loan-to-value ratios on its range of fixed-rate mortgages, from 60% to 70%.

The move, by the UK’s second-largest mortgage lender, comes as a breath of fresh air after months in which lending criteria have tightened.

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