Money Insider: Britannia and the Co-operative offer mortgage boost for first-time buyers

During the past six months the competition amongst mortgage lenders has intensified, despite the housing market showing precious few signs of recovery.

Many of the rate cuts have been available for borrowers with a 20 per cent deposit or more, with mortgage products aimed at the first-time buyer not even on the menu from some high-street lenders.

While 95 per cent and 100 per cent-plus loan-to-value (LTV) mortgages are unlikely to be found except for a few non-standard products where additional security is mandatory, and quite rightly so, there was some brighter news for those looking to buy their first property.

Britannia and the Co-operative Bank returned to 90 per cent LTV lending and launched a choice of very keenly priced products to support customers looking to purchase their first home.

For a two-year fixed rate there is a choice of 5.99 per cent and no fee or 5.49 per cent with a £999 fee, both look worth closer inspection and fare well against the current best buy of 5.98 per cent and £495 fee from Nationwide building society.

If you feel more comfortable with a longer-term fix, there are five-year options priced at 6.39 per cent and no fee or 6.09 per cent with a £999 fee, both will give the NatWest 6.39 per cent with no fee deal a run for its money.

For those who are comfortable with a variable rate mortgage, there is also a three-year tracker option for first-time buyers at 4.49 per cent with a £999 fee.

It's good to see that the competition which has driven rates lower in the mainstream mortgage market is starting to filter through for those looking to take that big step on to the first rung of the housing ladder.

This is welcome news, however, managing to scrape together a 10 per cent deposit will still seem a dream for many people.

In other mortgage news, ING Direct ramped up the pressure on HSBC at the top of the best buys for discounted tracker rate mortgages.

HSBC is now offering 2.29 per cent and £999 fee for two years, while this week ING relaxed the LTV from 60 per cent to 70 per cent for its 2.55 per cent two-year mortgage with no fee.

Yorkshire and Clydesdale tempt new customers with 0 per cent credit card

credit card providers have been through a couple of years that they would probably prefer to forget, not only having to deal with a surge in bad debts as the recession took hold but also coming under increasing pressure from the Government to offer customers a fairer deal.

As a result, the market was much quieter in 2009 with few new products being launched, and many of us wondered if the 0 per cent balance transfer deal was on its way out.

New research from Moneynet this week reveals this not to be the case and in fact the number of interest-free deals is virtually back to the levels seen in the summer of 2008.

Two years ago there were 80 0 per cent balance transfer cards on the market, of which 39 were for a term of 12 months or more. However, a year later, in the economic downturn, the number of 0 per cent cards plummeted to just 52 with only 24 being for one-year-plus.

Today there's a choice of 71 deals offering you the chance to switch to a 0 per cent card, with 39 for 12 months or more, so the appetite for new business has certainly perked up.

Another example of this increased desire to attract new customers was seen this week when Yorkshire Bank and Clydesdale Bank launched a 0 per cent balance transfer card for a market-leading 16 months.

The one-off transfer fee is in line with the majority of the market at 3 per cent and once the introductory period expires, the interest rate reverts to a respectable 16.9 per cent APR.

While it's good to see new products being launched and availability back up to 2008 levels, lenders will still be operating very tight credit-scoring strategies. If your credit record is squeaky clean then the garden looks quite rosy, although the size of the credit limit you'll be offered is likely to be much smaller than you'd have seen a couple of years back.

If your credit rating is tarnished then the experience is likely to be less positive and you may find your application for market-leading introductory offers declined or that you will be offered plastic but with a higher than standard rate of interest. While lenders still want new business and some "rate tarts" are still looking to switch their balance on a frequent basis, the goalposts have undoubtedly moved and a greater proportion of applicants will receive a "sorry, we are unable to approve" response rather than an envelope containing the piece of plastic they'd been hoping for.

Andrew Hagger is a money analyst at Moneynet.co.uk

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