Savings account to prepare first time buyers for mortgages

Wednesday, October 26, 2005

The Royal Bank of Scotland has announced an opportunity for first time buyers who are also savers.

The First Home Saver account is designed to encourage the customer to save towards a deposit for a first house and all the smaller things they need once they are moved in.

The account offers a 3.50 per cent gross AER and a £350 cash back payment when they complete their RBS mortgage.

"The Royal Bank's First Home Saver account is a smart way to get used to a new monthly commitment, aiding financial discipline by requiring a monthly deposit into the account," said RBS marketing product director Darrell Evans.

"Having an account specifically for saving towards your deposit and fees is an ideal way to separate your residual cash from your everyday spending."

The initial amount required to open the account is £500 and the amount of cash back varies depending on the amount that is saved in the account when the mortgage is taken.

The account is for new customers only, and it must be open for a minimum period of six months.

The news from RBS comes as the Financial Services Authority announced a new jargon-busting website aimed at first time buyers and those confused by mortgages.