Leeds Building Society offers 'free' mortgage deal


Potential customers talk to a property a

Like the sound of a free Help to Buy mortgage? Leeds Building Society is offering a 0% offer for up to six months on new-build homes. Potentially the deal would slash your outgoings by some margin for the tricky first few months of home ownership.

But does Leeds' deal offer good value, longer term? Or is it just a marketing gimmick?

Leeds" Welcome Mortgage deal is a fixed-rate mortgage offered through the Help to Buy equity loan scheme, but only through Barratt homes, be advised. As part of the deal, you delay paying interest for the first six months - and just repay the capital part of the monthly mortgage payments.

In return you will pay more every month for the rest of the mortgage period.


Martin Parkin, advising partner from Fulford Mortgage Advisers, concedes that this deal could appeal to people starting out in their first home, who are struggling to pay for carpets and furniture, and would be grateful for the breathing space.

However, he adds: "I don't recommend deals like these." He has two complaints about them. He explains: "I think you need a rate at the start where you can anticipate your costs for the long-term." There is a concern that people could budget on the lower repayments and find it hard to adjust when they increase later.

Cast your net further

His second point is that there are other competitive deals on the market. He recommends looking around. You don't need to confine yourself to new-build, either. Virgin Money are offering some interesting, good value Help to Buy deals he says.

However Ray Boulger of John Charcol told the Independent that there were still risks, especially when choosing a two-year fix with Help to Buy.

"At the moment no lenders are offering viable remortgage options for Help to Buy-type equity share mortgages, unless the purchaser repays the equity share. This means those taking a two-year fix run the risk of having few options at the end of the initial fixed rate."

Santander, he adds, is however offering a 3.44% deal with free valuation, no arrangement fee, plus £250 cashback.

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