Spotlight On: Halifax first-time buyer mortgage

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The deal

The Halifax is offering to pay the fees on mortgages for first-time buyers.

The good points

The Halifax says its move will save a typical first-time buyer at least £1,986. That includes a product fee of about £995, plus £506 of conveyancing costs, as well as a £240 valuation fee and about £250 on the costs of setting up the mortgage.

The bad points

Borrowers have to take out a two-year, fixed-rate loan at 5.79 per cent. There's an early repayment charge of 3 per cent in the first year, 2 per cent in the second year.

Conclusion

Hidden fees and charges are a nasty way for a lender to spring unexpected and expensive surprises on borrowers. Scrapping them all means borrowers can just look at the headline charges to work out whether they can afford the loan. A two-year fix at 5.79 per cent is not particularly cheap. First Direct, for example, has a two-year deal at 2.69 per cent. But Halifax is offering the loan to those who have just a 10 per cent deposit. Among lenders which offer deals at 90 per cent loan-to-value, it looks competitive.

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