Skipton Building Society is launching a new mortgage specifically for first-time buyers on January 13.
The product has an initial rate of 3.95% in year one and offers borrowers 1% cashback on completion. This equates to monthly interest repayments of £330 on a £100,000 mortgage in the first year and cashback totalling £1,000.
The Flexible First Step Mortgage offers a 1.75% discount on the variable rate in year one, followed by a 0.3% discount in year two, then lifetime discounts through the society's Concessionary Mortgage Discount Scheme.
It is available up to 95% LTV with free MIG and free valuation. Interest is calculated daily and borrowers can make up to 10% capital repayments without charge each year for four years
The redemption charge is 3% of the mortgage balance for the first two years and a £150 application fee applies.
Jennifer Holloway, head of corporate communications at Skipton, says: “When people are buying their first house, they often don't think further than saving the down payment and getting a mortgage.
“But a new house comes with many additional costs – furniture, fixtures and fittings, unexpected bills. This mortgage offers 1% cashback to help first-time buyers enjoy their new home, whilst still benefiting from an attractive rate of interest.”