Lloyds Banking Group is to offer government-backed Help to Buy mortgage guarantee products to its direct customers.
Go deeper with GlobalData
Help to Buy mortgages are already available to customers of Lloyds subsidiaries Halifax and Bank of Scotland.
The rates offered by Lloyds Bank will be higher than the ones offered by its competitors. The leading rate in the sector is currently held by HSBC with a 4.79% two year-fix and five year fix for 4.99%. Both the banks have a booking fee of £99 ($162.87)
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataLloyds will offer the mortgage with no fees but the rate will rise to 5.59% and customers that do not have a Lloyds Bank current account will pay a rate of 5.39% with a £995 fee or 5.79% with no fee.
Stephen Noakes, mortgage director at Halifax, said: "A significant number of applications are coming from people buying their first home, which shows that the scheme is helping those that can afford the monthly payments but until now, have not been able to get the necessary deposit."
UK Prime Minister David Cameron said: "As part of our long-term economic plan we introduced the Help to Buy scheme, so hardworking people with sufficient earnings can get on, fulfil their aspirations and enjoy the security of owning their own home."
According to Downing Street the house building is now growing at its fastest rate since 2008 and Help to Buy encourages "responsible lending".
A group of commentators, economists and politicians, including the business secretary Vince Cable have publicly declared the Help to Buy plan risky as long as it is artificially pushing up house prices and may cause a housing bubble.
Related articles:
UK government’s Help to Buy scheme to generate £1bn in home loans
UK plans to sell remaining 33% stake in Lloyds Bank
UK remortgage levels fuelled by costs of Christmas
