Potential homeowners are being advised to take a closer look at smaller banks as opposed to the bigger lenders’ Help to Buy mortgage deals.
The Guardian reports that it considers the first batch of offers based around the government initiative to be “underwhelming”, although “better deals have been cropping up elsewhere”.
Help to Buy gives people who want to buy a property the opportunity to access preferential rates of interest with just a five per cent deposit .
However, just three banks are offering consumers the chance to take advantage of the initiative so far.
Of those, Halifax boasts the cheapest deal – with customers being put on a fixed rate of 5.19 per cent over two years, while the product fee costs £995.
In comparison, first-time buyers with Yorkshire Bank and Clydesdale Bank would pay a 4.99 per cent interest rate with no fee, while Hanley Economic Building Society is running with a 4.89 per cent two-year fixed rate.
It is hoped Help to Buy deals will become more competitive in the new year, when more banks launch their own products.