First Direct was launched in 1989. It relies on telephone and now internet banking in Leeds and Hamilton, Scotland. It employs over 3,000 people and has 1.2 million customers. About 750,000 of these customers use the internet. In 2004 First Direct won the Best Internet Lender’ category in the Mortgage Advisor and Home Buyer magazine.

First Direct mortgages are designed to be flexible, you can opt to stop and start the Capital repayments as long as you cover the monthly interest payments. You can even at any time choose to overpay, which could reduce the overall cost of your mortgage and shorten the mortgage term.

You can also get Interest Only repayment mortgages. You will make lower monthly payments but you only pay for the mortgage loan itself and do not pay back any of it, provided that you remain responsible for ensuring that you can repay your mortgage on or before the age of 65.

First Direct offer the following types of mortgage:

Variable Rates
Fixed Rates
Offset Rates

Variable mortgages: at start you benefit from a discounted variable rate for three months, the rate then goes back to the standard variable rate for the rest of the mortgage term.

Fixed rates: this mortgage rate is set for an agreed period of time. Thus, even if rates rise your mortgage rate will stay the same. However, if the variable rate falls, you could pay more for your mortgage during the fixed rate period.

If you repay your mortgage during the fixed rate period, an early repayment fee will be charged .

Offset rates: your initial rate is set at First Direct’s discounted variable rate for three months, followed by the standard variable rate for the remaining mortgage term. You can link your current account and day-to-day savings to your mortgage and use these balances to offset the amount you owe on your mortgage, and just pay the interest on the difference.

Interest is calculated daily