The HSBC owned online and telephone lender has begun selling mortgages again to new customers. It is speculated that the re-entry by First Direct could signal an improving market and a better future for borrowers.
Since First Direct pulled out of the market, rates have risen significantly. It remains competitive but is not the cheapest on the market.
The bank's two-year fixed rate of 4.75% had been one of the best on offer to homeowners at a monthly cost of £594 on a typical £150,000 interest-only homeloan.
Today the bank charges 5.76%, with a £499 booking fee and £1,499 arrangement fee. Monthly repayments would be £720 on £150,000. All its deals are only available up to 80 per cent loan to value and on loans of £400,000 or less.
Borrowers can get a two-year fix of 5.75% from Loughborough building society. Monthly repayments would be just £1 less at £719 but the deal has a much lower £649 arrangement fee and is available up to 90% loan to value. Skipton building society offers 5.79% fixed for two years up to 95% loan to value with a £799 fee.
Mildred is an author of several articles pertaining to Mortgages. She is known for her expertise on the subject and on other Business and Finance related articles.