Barclays launches NewBuy mortgages

Barclays has reaffirmed its commitment to first time buyers with the launch of two competitively priced mortgages with rates from 4.99 per cent, to support the Government's NewBuy initiative which will provide mortgages up to 95 per cent loan to value (LTV) for new build properties in England.

First time buyers or home movers purchasing a new build house or flat with participating builders up to the value of £500,000 will have a choice of a Barclays two year fixed rate mortgage at 4.99 per cent or a four year fixed at 5.89 per cent, both come with a £499 application fee and revert to a lifetime tracker at base + 3.99 per cent.

Andy Gray, head of mortgages for Barclays said: "We are pleased to be one of the first lenders to be helping even more buyers with small deposits to buy new homes. We believe this will boost housing market confidence and support the flow of new housing providing positive consequences for jobs and the economy as a whole. The mortgages we have launched today give buyers a really attractive rate, and strike the right balance for Barclays and builders to offer 95 per cent mortgages in a sustainable way."

Barclays has actively been helping more first time buyers get on the property ladder and this was confirmed in its recent results, with lending to first time buyers up 22 per cent in 2011, supported through the extension of mortgages up to 90 per cent LTV in October 2011.

In 2010 Barclays pioneered a similar mortgage indemnity scheme ‘Perfect 10' with Bovis Homes to help stimulate the new build market at 90 per cent LTV, which has helped to shape the NewBuy scheme.

Under NewBuy, house builders and the Government have committed to cover a limited amount of any future losses. The house builder will ring fence 3.5 per cent from the sale and the Government 5.5 per cent which will be used to compensate lenders if they have to repossess the home and sell it for less than the mortgage value.

The NewBuy mortgages launched today through Barclays will be available on new Bovis, Barratt, Bellway, Redrow, Persimmon and Taylor Wimpey homes. Homebuyers interested in purchasing a new home should contact their local development or visit the builders website.

A typical first-time buyer purchasing a new home with the participating builder at £180,000 and requiring a mortgage of £171,000 would pay £998.65 per month on a 25 year repayment basis, when taking out the Barclays two year fixed at 4.99 per cent.

For more information on NewBuy consumers can visit barclays.co.uk/mortgages.