Halifax current account-holders get an extra £150 cash back on completion and the loan is only available to all customers on a repayment basis to a maximum of £1m.
The 85 – 90% Loan-to-Value (LTV) loan follows the lender’s First-Time Buyer Pledge launched last year, promising among other things, to explain why an application has been declined.
Halifax said today’s first time buyer typically pays a product fee of around £995, but the cash back can be used to pay home-buying costs, including conveyancing and valuation.
Stephen Noakes, mortgage director at Halifax, said: “Housing affordability is at an eight-year high for first-time buyers at the moment, largely as a consequence of the fall in house prices since 2007. However, buying a house has always been an expensive process and for first-time buyers every bit of help counts.”
John Bartley, managing director, Oracle Property Finance, said the more lenders can do to encourage people to buy the better.
“However, fee-free deals are not particularly attractive because it’s the deposit shortage most first-time buyers are struggling with. Generally, first-time buyers roll the fees into the loan anyway,” said Bartley.
