Help to Buy mortgage rates are apparently being undercut by smaller building societies which are offering even cheaper deals.
According to thisismoney.co.uk, smaller companies are offering low-cost loans which cost much less than the larger banks involved in the government initiative.
For example, Hanley Building Society’s two-year fixed rate for buyers with a five per cent deposit has been recently cut to 4.89 per cent.
The deal also includes a free valuation on properties worth up to a quarter of a million pounds and £250 cashback, while the product fee is £350.
To put this into perspective, thisismoney.co.uk reports that a £150,000 mortgage would cost £867 per month and the total cost would be £20,915.
In comparison, a Help to Buy deal with NatWest would see monthly costs equate to £876, meaning that the total cost would be £109 more expensive than Hanley Building Society.
The whole idea behind Help to Buy – other than helping those with a smaller deposit to get onto the property ladder – was to allow purchasers access to preferential mortgage rates.