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A Moneyfacts residential mortgage analysis has found that first-time buyers looking for lower interest rates and a more tailored approach to their mortgage application could be better served by the building societies.

Analysis of mortgage loans aimed at the first-time buyer market, where deposits of around 10% or even 5% are common, has discovered the average rates for a two-year fixed deal are slightly below the sector average at building societies.

Building societies they found used a more tailored approach when assessing applicant’s suitability and risk, something which suited first-time buyers.

Surprisingly they found that two-year fixed-rate deal mortgages on offer across the market for borrowers with small deposits, had fallen since the Bank of England increased its base rate in August 2018.

Being the life blood of the market, there seemed to be a concerted drive by both building societies and non-mutuals to secure the mortgage business of first-time buyers.

Recent mortgage lending figures have shown first-time buyer numbers were at record highs at the start of this year and those stepping onto the property ladder made up a large proportion of new business for lenders.

For borrowers who could only stump up 5% of their property’s value as a deposit, Building Societies also appeared to be heading the market.

Further up the deposit scale, for those with a healthy 40% deposit, however, building societies were slightly more expensive – offering rates which were, on average, 0.09% higher than non-mutuals.

When it comes to choice, building societies offered 31% of the mortgages which were for borrowers with 10% deposits. In the 5% deposit sector, building societies offered 43% of the deals available.