Spotlight On: First Direct Homebuyer loans

The deal

The online bank owned by HSBC yesterday launched a new range of Homebuyer mortgages aimed at first-time buyers and home-movers.

Good points

First Direct's new loans are all fee free. That means no arrangement fee, no booking fee and no standard valuation fee. It means the headline APR rate is what you get and you don't need a calculator to work out the true cost.

Bad points

Rates are 4.49 per cent with a 15 per cent deposit, and 4.59 per cent if you have 10 per cent.

Conclusion

Cutting fees is a great move as it allows potential borrowers to see at a glance how much a loan is going to cost. When comparing these deals with rivals' offerings, however, you'll still need to factor in arrangement fees of up to £2,000 per loan.