Super reaction to Halifax's 7-year fixed rate

Available from today, the mortgage comes with £500 cash back towards moving costs and has no product fee.

The lender is also reducing rates across its product range in further support for homemovers and FTBs.

This longer term high LTV mortgage deal has been introduced as part of Halifax’s campaign to help FTBs onto the housing ladder.

Halfax’s ability to offer the product is a result of its participation in the government's Funding for Lending Scheme – an initiative introduced to stimulate the UK housing market.

Ian Wilson, head of sales at Halifax Intermediaries, said: “We are providing brokers with a very competitive product enabling them to offer their first time buyer clients a product designed specifically with them in mind.

“This offers a real solution for aspiring homeowners.”

Mike Fitzgerald, sales director of small network The EMBA Group, welcomed the emergence of a new product for FTBs.

He said: “It’s nice to see a lender that is offering a high LTV product for FTBs especially with a cash back feature and no fee, we now need other lenders to catch up hopefully it may start a trend.”

One industry pundit raised concerns that the product was “merely a headline grabber” which would result in very little completions due to very strict underwriting rules.

However, Fitzgerald did not share the same view.

“Lenders have already tightened up their criteria so I don’t think it will be any harder than it already is – we know what a lender wants for a first-time buyer application.

“They may be a little pickier over the credit score but I think lenders are slowly getting over that because if they tighten up underwriting any further they won’t be doing any business.”

He explained that the seven-year tie in may put some FTBs off because it is widely thought that interest rates will stay low until 2017 but with the additional features, customers may be enticed to take the plunge.

Ashley Brown, director at independent mortgage broker, Moneysprite added: "We have been waiting a long time for a genuinely attractive and affordable product for first time buyers and, at first sight, this does seem to tick all the right boxes.

"In the past, lenders have produced headline grabbing products aimed at first time buyers, but stringent lending criteria have meant that very few applicants are successful. With Halifax's commitment to lend £5bn to homeowners by the end of the year and the support of the Government's Funding for Lending scheme, you would hope this will not be the case this time, but only time will tell.

"The term of the mortgage may be off-putting to some borrowers who may not feel comfortable locking in for seven years. However, being able to guarantee repayments may appeal to first time buyers who are entering the housing market while the base rate is at a historic low and are only likely to see it rise in the future.

"It will be interesting to see how the other lenders react to this statement of intent from Halifax. Lenders like Santander and Nationwide will not want to lose the initiative and we may very well see a swathe of new products aimed at first time buyers hitting the market in the next few months.”

Halifax Intermediaries has reduced a number of selected 2 year fixed and tracker products for homemovers, first time buyers and remortgage customers by up to 0.20%.

No product fee 2-Year Trackers are also being introduced at 80 and 85% for Homemovers, FTB and Remortgage products.