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Mortgages
First Direct offers some of the market's most competitive mortgage rates and highly rated customer service, but you can only apply direct, not through a broker. Here's an independent look at eligibility, fees, and how First Direct compares.
First Direct is generally considered one of the better mortgage lenders in the UK, particularly for borrowers with a clean credit history and straightforward circumstances. It regularly features in best-buy tables and holds some of the strongest customer service ratings in the market.
The main catch is that First Direct mortgages are only available direct from First Direct - you can't apply through a broker, so you'll need to compare them separately from the rest of the market.
Compare your options
Speak to an advisor who compares a wide range of lenders and can help you weigh First Direct against other options for your circumstances.
First Direct mortgages regularly rank among the UK's most competitive, particularly for borrowers with larger deposits. As a division of HSBC, this telephone and internet-only lender has built a strong reputation for customer service and straightforward products since launching in 1989.
But there's an important catch: First Direct mortgages aren't available through brokers. You can only apply directly with them, which means you'll need to do your own research to work out if they're right for you.
In this review, we'll break down First Direct's mortgage range, fees, eligibility requirements, and how they compare to alternatives. We'll also explain when First Direct is likely to suit you and when you might be better off looking elsewhere.
Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
Overall rating: 4.2 out of 5
Why choose First Direct
First Direct is a telephone and internet-based bank that operates as a division of HSBC UK Bank plc. Unlike traditional high-street banks, First Direct doesn't have its own branch network, though customers can use HSBC branches for certain services like depositing cheques.
The bank launched on 1 October 1989 as the UK's first telephone-only bank, created by Midland Bank, which later became part of HSBC. That pioneering approach to branchless banking helped establish First Direct's reputation for innovation and customer service.
Today, First Direct serves around 1.9 million customers across current accounts, savings, mortgages, loans, and credit cards. The bank is headquartered in Leeds and employs UK-based customer service staff who are available by phone 24 hours a day, 365 days a year.
First Direct is a division of HSBC UK Bank plc, which is authorised by the Prudential Regulation Authority and regulated by both the Financial Conduct Authority and the Prudential Regulation Authority.
Deposits with First Direct are protected by the Financial Services Compensation Scheme up to £85,000 per person. The bank uses encryption, two-factor authentication, and Secure Key devices to help protect customer money and data.
First Direct has consistently ranked among the UK's most recommended banks. In the Competition and Markets Authority's service quality survey, First Direct was ranked top for overall service quality. The bank also holds a 4.5 out of 5 rating on Trustpilot based on over 35,000 customer reviews.
For mortgages specifically, First Direct has won the Moneyfacts Best Bank Mortgage Provider Award and has consistently featured in best-buy tables.
First Direct offers residential mortgages only. It doesn't provide buy-to-let mortgages, commercial mortgages, or bridging loans.
Its mortgage range divides into two main categories.
These are traditional mortgages where your monthly payment covers both interest and a portion of the capital you borrowed. At the end of the term, you'll own your property outright.
Repayment mortgages from First Direct are available with:
First Direct also offers offset mortgages, which link your savings and current account balances to your mortgage. Instead of earning interest on your savings, those balances reduce the amount of mortgage interest you pay.
For example, if you have a £200,000 mortgage and £30,000 in linked savings, you'd only pay interest on the remaining £170,000.
Offset mortgages are available in 2-year fixed and tracker variations, but there are stricter requirements:
First Direct regularly features in best-buy tables for mortgage rates, particularly for borrowers with larger deposits. Because rates change frequently, we won't quote specific figures here - speak to an advisor or check First Direct's website directly for current pricing.
First Direct organises its mortgages into three product types.
Standard products: these come with a booking fee but offer a lower interest rate. They tend to work out more cost-effective if you're borrowing a larger amount, where the fee represents a smaller percentage of your loan.
Fee Saver products: no booking fee, arrangement fee, or completion fee, plus a free standard valuation. The trade-off is a slightly higher interest rate. These tend to suit smaller loans, where the fee saving outweighs the extra interest.
Limited Edition products: special offers with their own fee structures, available alongside the Standard and Fee Saver ranges.
First Direct's rates are genuinely competitive, and the lender has been active in reducing rates for higher loan-to-value products to help first-time buyers with smaller deposits.
What makes First Direct's pricing interesting is its differential pricing approach. It offers different rates for:
This means you might find First Direct offers particularly good rates for your specific situation, even if they're not the cheapest across the board. Speak to an advisor to understand how First Direct's pricing compares with the rest of the market for your circumstances.
Understanding the full cost of a First Direct mortgage means looking beyond just the interest rate.
First Direct charges a booking fee of £490 for Standard products. This fee:
Fee Saver products have no booking fee.
Some First Direct mortgages also have an arrangement fee, which is paid when the mortgage is drawn down. You can add this to your loan, but remember this increases your mortgage balance, the total interest you pay, and your monthly payments.
For purchase mortgages in England and Wales, First Direct provides a free standard valuation. For remortgages, you'll need to pay for the valuation yourself.
First Direct covers certain legal costs depending on your situation:
If you repay your entire mortgage early during a fixed rate period, you'll face early repayment charges. These typically start at around 3% of the original mortgage amount in year 1 and reduce over the remainder of the fixed period.
There's an important flexibility, though: you can make unlimited overpayments on all First Direct mortgages without incurring early repayment charges. This only applies to partial overpayments, not full repayment.
Because Standard and Fee Saver products carry different rates and fees, and rates change frequently, the right structure for you depends on how much you're borrowing and how long you expect to keep the mortgage. As a general rule, Standard products with a booking fee tend to work out cheaper on larger loans, while Fee Saver options can suit smaller amounts where the fee saving outweighs the rate difference. Speak to an advisor to work out which structure fits your circumstances.
If you're planning to overpay significantly, the unlimited free overpayments on First Direct products are hard to beat. Just remember this only covers partial overpayments - clearing the full balance early during a fixed period still triggers an early repayment charge.
First Direct has relatively straightforward eligibility criteria, but they're stricter than some competitors, particularly around credit history.
To apply for a First Direct mortgage online, you and any joint applicant must:
This age limit is stricter than some competitors, who allow mortgages to extend into the 70s or even 80s.
First Direct is conservative about credit history. Within the last 3 years, neither applicant can have been:
First Direct recommends obtaining your credit files from credit reference agencies before applying, so you're aware of any potential issues. If you're worried about problem debt or aren't sure where you stand, free and impartial guidance is available from MoneyHelper at moneyhelper.org.uk or by calling 0800 138 7777.
There's no minimum income requirement for standard repayment mortgages, but First Direct assesses affordability carefully:
For offset mortgages, there are minimum income requirements:
Self-employed applicants can get a First Direct mortgage, but they'll typically need:
This is more flexible than some lenders, who insist on 3 years' accounts.
First Direct mortgages are available for properties that are:
First Direct won't lend on:
For specific property types:
First Direct's 3-year clean credit rule catches out more applicants than the headline criteria suggest. Even a small missed payment showing up as a default can be enough to trigger a decline, so it's worth checking your credit file carefully before you apply.
First Direct mortgages can only be applied for online or by phone. It doesn't work with mortgage brokers, and you can't apply in branch, though you can use HSBC branches for some services once you're a customer.
Total typical timeline: 2-4 weeks from application to offer, though this can be longer for complex cases or at busy times.
Some customers report First Direct being slower than competitors like Nationwide, particularly during busy periods. If speed is critical, this is worth considering.
How it works
Get an Agreement in Principle
Start by getting an Agreement in Principle (AIP), which tells you how much First Direct would be willing to lend based on your circumstances. It's valid for 6 months and involves only a soft credit check that won't affect your credit score.
Make a full application
Once you've found a property and had an offer accepted, start your full application online, then speak with a First Direct mortgage advisor by phone to complete it. The advisor reviews your circumstances and recommends suitable products from First Direct's range, at no extra cost and with no pressure to proceed.
Submit your documents
You'll need proof of identity, proof of address, proof of income, and bank statements, along with details of the property and estate agent. First Direct's online document uploader makes this easier.
Valuation
First Direct arranges a valuation of the property. For purchases in England and Wales, the standard valuation is free and typically happens within 3-5 working days.
Underwriting and decision
The underwriting team reviews your debt-to-income ratio, the property valuation, recent credit activity, and employment stability. Communication during this stage is mainly by post and email.
Mortgage offer
If approved, you'll receive a formal mortgage offer detailing the terms, rates, and conditions. This is sent to you and your solicitor.
Completion
Your solicitor handles the legal work. For remortgages where property ownership isn't changing, First Direct prepares the legal documentation, so you won't need to pay basic solicitor costs for that element.
First Direct's customer service is one of its biggest strengths. The bank consistently wins awards for customer satisfaction and maintains an "Excellent" rating on Trustpilot.
There's no email support for general queries, but you can message through the app or online banking once you're a customer.
First Direct's Trustpilot rating is 4.5 out of 5 from over 35,000 reviews. Common themes in positive reviews include:
The consumer site Which? ranked First Direct third out of 21 mortgage lenders in its most recent assessment, based on customer service, value for money, and transparency of charges.
Not every review is positive. Common complaints include:
Since First Direct doesn't work with brokers, you'll need to compare it yourself against other direct lenders and the wider market.
Nationwide advantages: a branch network for face-to-face service, more flexibility on credit history, higher LTV options in some cases, and often faster processing.
First Direct advantages: often slightly lower headline rates, better customer service ratings, free unlimited overpayments on all products, and a longer AIP validity (6 months versus 3 months).
Verdict: Nationwide can be the better choice if you want branch service or have less-than-perfect credit. First Direct tends to suit you better if you prioritise rates and don't mind phone or online-only service.
Halifax advantages: available through mortgage brokers, a first-time buyer boost that increases borrowing potential, a branch network throughout the UK, and often faster processing times.
First Direct advantages: consistently lower rates at comparable LTVs, better customer service ratings, free unlimited overpayments, and no broker fees to pay.
Verdict: Halifax can work well if you want broker access or its first-time buyer boost. First Direct typically offers better rates if you can meet its eligibility criteria.
Both are part of the same group, but they operate differently.
HSBC advantages: available through mortgage brokers, an extensive branch network, sometimes exclusive rates for existing banking customers, and more products including buy-to-let.
First Direct advantages: generally lower mortgage rates, much better customer service ratings, a simpler product range, and often slightly better existing-customer loyalty rates.
Verdict: First Direct usually comes out ahead of HSBC on rates and service for residential mortgages, but HSBC offers more product variety and broker access.
Head to head
Borrowers with good credit and straightforward circumstances. If you have a clean credit history, stable employment, and are buying a standard property, First Direct's competitive rates make it worth considering.
First-time buyers with decent deposits. First Direct has worked hard to offer competitive rates at 90% and 95% LTV, making it worth considering if you're getting on the property ladder.
People who value customer service. If you want to speak to helpful, UK-based advisors who will guide you through the process, First Direct excels.
Those comfortable with phone or online service. If you don't need face-to-face meetings and are happy managing everything by phone and online, you'll find First Direct straightforward.
Borrowers who want overpayment flexibility. The unlimited free overpayments make First Direct worth considering if you plan to pay down your mortgage faster.
Anyone with recent credit issues. If you've had a CCJ, IVA, or bankruptcy in the last 3 years, First Direct won't accept your application. Specialist lenders may be a better starting point.
Self-employed with complex income. First Direct does accept self-employed borrowers, but if you have irregular income, multiple income sources, or less than 2 years' trading history, other lenders may be more flexible.
Buy-to-let investors. First Direct doesn't offer buy-to-let mortgages at all.
Older borrowers. The maximum age of 69 at application, and the requirement to end the mortgage before 70 or retirement, rules out many older borrowers who'd be accepted elsewhere.
Anyone who needs broker support. If you want an advisor to search the market and handle the paperwork, you'll need to exclude First Direct from that search, unless you're willing to apply directly in parallel.
First Direct is a strong choice for borrowers with good credit, straightforward circumstances, and a preference for excellent customer service. Its rates are genuinely competitive, and features like free unlimited overpayments and 6-month AIP validity add real value.
The main drawbacks are the inability to access First Direct through brokers and its stricter eligibility criteria. If you have any credit history concerns, unusual income, or want buy-to-let, you'll need to look elsewhere.
Since First Direct doesn't work with brokers, comparing it properly takes a bit of extra effort. Here's our recommended approach.
We compare options across a wide range of lenders to help you find one that suits your circumstances. Just bear in mind that First Direct's rates won't appear in our searches, since it only deals directly with customers. If you want to include First Direct in your comparison, you'll need to check with them separately.
Getting the full picture
Get a First Direct Agreement in Principle
Start by checking what First Direct would offer you directly. Its online tools make this straightforward.
Speak to an advisor
Get quotes from the rest of the market by speaking to an advisor who compares a wide range of lenders. They can search dozens of lenders, though First Direct won't be among them.
Compare total costs
Look beyond headline rates to include all fees, then weigh up the total cost over your expected time in the property.
Consider convenience factors
Think about processing times, customer service, and flexibility features like overpayments, not just price.
Common questions
Yes, First Direct is generally considered one of the better mortgage lenders in the UK. It consistently offers competitive rates, has excellent customer service ratings, and provides useful features like free unlimited overpayments. But its stricter eligibility criteria mean it isn't right for everyone, particularly those with credit issues or complex circumstances.
No. First Direct mortgages are only available direct from First Direct, either online or by phone. This is an important consideration if you're using an advisor to compare the whole market, as you'll need to check First Direct separately yourself.
First Direct doesn't publish minimum credit score requirements, but it's stricter than many lenders. You can't have had any CCJs, IVAs, or bankruptcies within the last 3 years. It recommends checking your credit file before applying so you know what it will see.
Straightforward applications typically receive a mortgage offer within 2-3 weeks. Complex cases can take longer. First Direct's processing times have been criticised by some customers as slower than competitors, particularly during busy periods.
Yes, First Direct offers 95% LTV mortgages for first-time buyers and home movers. These products have been a focus for the lender, and First Direct has continued to develop this range.
Yes, but you'll typically need at least 2 years' trading history (1 year may be accepted in some circumstances) and certified accounts or SA302 tax calculations. Self-employed applicants with complex income situations may find other lenders more flexible.
You must be 69 or under at the time of application, and your mortgage must end before you turn 70 or reach your anticipated retirement age, whichever is sooner. This is stricter than some competitors who allow mortgages into the 70s or 80s.
No. You can make unlimited overpayments on all First Direct mortgages without incurring early repayment charges. This only applies to partial overpayments - full repayment of the mortgage would still incur early repayment charges during the fixed period.
Yes, First Direct is a division of HSBC UK Bank plc. It was originally launched by Midland Bank in 1989, which later became part of HSBC. Despite being part of HSBC, First Direct operates as a separate brand with its own products and its own approach to customer service.
You can use HSBC branches for certain basic services like depositing cheques, but First Direct is primarily a telephone and internet bank. You can't get mortgage advice in branch.
You'll automatically move onto First Direct's Standard Variable Rate (SVR), which is typically higher than fixed rates. First Direct allows you to arrange a new rate up to 90 days before your current deal ends, so you don't have to move onto the SVR in the meantime.
Interest-only is available on offset mortgages, but only for existing First Direct customers. Standard repayment mortgages are capital and interest only.
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