The building society is offering customers a competitive interest rate of four percent on its First Home Saver. This savings account is aimed at first-time buyers saving up for a deposit for their first property.
The second issue of Coventry Building Society’s First Home Saver has been created to have no minimum monthly limit which allows savers to build a deposit at their own pace.
In the UK, the average house price is now at £315,119 as of December 2022, according to the UK House Prices Index.
Due to this, first-time buyers would need to save over £15,750 for a five percent deposit.
Furthermore, the average first-time property buyer also spends £9,780 on additional upfront costs, including moving fees, legal fees as well as surveyor, valuation and mortgage fees.
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Thanks to the First Home Saver, deposits of up to £1,000 can be saved in the account every month for up to three years.
After at least six months of saving, a £500 bonus will be paid to the saver’s account following the completion of a residential Coventry Building Society mortgage, which is used to buy a first home.
Accounts can be opened online, over the phone or by visiting a Coventry Building Society branch.
The account also allows for the building society’s customers to withdraw their funds with 60 days’ notice, or immediately with a charge equal to 60 days’ interest on the amount withdrawn.
Ian Biggs, the head of Product Performance at Coventry Building Society, shared why the financial institution provides this savings account for future homeowners.
He explained: “First-time buyers are the lifeblood of the property market, and we want to provide all the support we can to help them realise their dreams.
“We understand taking that all-important first step on the property ladder can be a challenge with rising house prices and the vast effort made into saving for a deposit.
“Our First Home Saver (2) pays a market-leading interest rate of four percent for first-time buyers with the flexibility to change the amount paid into the account to a maximum of £1,000 a month and a possible £500 reward.”
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According to Mr Biggs, parents and guardians of those wanting to buy property are also set to benefit from Coventry Building Society’s account.
The savings expert added: “This account also caters for the bank of mum and dad and other relatives too.
“Parents will often help their kids get on the property ladder and by doing so, if their child completes a mortgage with us, they can receive a £500 bonus.”
This latest move from Coventry Building Society comes amid a wave of interest rate increases across the savings market.
High street banks and building societies have been quick to respond to the Bank of England’s series of base rate hikes, which have been passed onto savers.
As it stands, the UK’s base rate is sitting at four percent after having been raised ten consecutive times in a row.
While homeowners and those in debt have struggled with their debt repayments going up, this has been a boon for savers.
Experts believe another interest rate increase as the Bank of England attempts to address the country’s skyrocketing inflation rate.