Co-op launch fee-free mortgage for first-time buyers

The Co-operative Bank has launched a two-year fixed-rate mortgage at a rate of 3.99% with no set-up fees, following the launch of the government-backed Funding for Lending Scheme (FLS), designed to increase mortgage lending. The bank said that the £80bn FLS introduced by the Bank of England and the Treasury in August had enabled it to introduce the cheap mortgage rate as the scheme offers lenders cheap access to finance. James Hillon, head of mortgages at the Co-operative Bank, said: “We welcome the Funding for Lending scheme as a route to boosting the housing market and the wider economy, but believe this goal will only be achieved by increasing the availability of mortgages to first-time buyers rather than just focusing on remortgage customers.” Bank of England data released last week show that volume of loans approved for property purchases increased by 2,103 to 50,024 in September, while the number of loans approved for remortgaging rose by 1,860 to 28,343, following the introduction of the FLS. Research also shows that the number of mortgage products on the market for people with a 10% deposit is steadily rising, and has risen from 259 when the FLS started in August, to 300 by the start of November. Paul Hunt, managing director of Phoebus Software, said: “Banks have been under fire for too long for not lending enough. Well, these figures show lenders are doing their bit to support the property market.”

Article courtesy of Property Investor Today
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