TSB launches new mortgage product range to help first time buyers get on the property ladder

  • New range of mortgages will move customers onto a lower follow-on tracker rate after the fixed term ends – an industry first
  • First-Time Buyer applications will be stressed at a lower rate of 5.6% instead of 6.6% as a result of the lower follow-on tracker rate

TSB has today launched a new product range of mortgages specifically aimed at first-time buyers to help them get on the property ladder.

The mortgages will enable first-time buyers to automatically move onto a follow-on tracker rate that is lower than the current TSB Homeowner Variable Rate after the fixed period ends. This means that the total amount payable (TAP) during the mortgage term will be reduced.

The key features of the First-Time Buyer mortgage range are as follows:

  • The First-Time Buyer product range interest rates will start from 1.34%. The range includes fixed two-year, five-year and ten-year products, as well as five-year and ten-year fix and flex products. Following the end of the fixed term, customers will move onto a lower follow-on tracker rate of 2.49% above base rate and currently 2.59%, instead of the current TSB Homeowner Variable Rate of 3.59%.
  • This means that all First-Time Buyer products will result in a lower TAP over the term of the mortgage compared to TSB’s home mover products if the customer remained in the tracker – so customers will pay back less as they repay their mortgage. For example, a customer borrowing £100k over 30 years at an initial rate of 3.49% would now pay a TAP of £148,830.35 instead of £162,901.57.
  • As a result of the lower follow-on tracker rate, First-Time Buyer applications will be stressed at a lower rate of 5.6% instead of 6.6%. This will help more first-time buyers to be able to buy the home they want, whilst ensuring doing so remains affordable for them over the full life of their mortgage.
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The product range also includes a new five-year fixed stepped down product just for first-time buyers:

  • The stepped down rates will start from 2.54% (depending on Loan to Value) and will reduce four times over five years so the customer will see a decrease in their mortgage payments. At the end of the five years they will move to the follow-on tracker rate of 2.59% (2.49% above current base rate).
Nick Smith, TSB’s Head of Mortgages said

“We know that buying your first home can be difficult and we want to do more to help First-Time buyers get on the property ladder. That’s why we’re introducing this new suite of mortgage products giving customers money confidence to search for their first home.”

The information contained in this press release is intended solely for journalists and should not be used by consumers to make financial decisions.

Notes to editors

  • More information including rates and ERCs on our First-Time Buyer products can be found here.
  • Earlier this year TSB launched an industry first – a five-year Fix and Flex Mortgage (0-80% LTV) to help homeowners, particularly in the wake of Covid-19. More information here.
  • In July, TSB was awarded ‘Best Fixed Rate 2020’ from What Mortgage? More information here.

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