First Direct


First Direct was lauched in October 1989 by Midland Bank, which was one of the big 4 banks in the UK at that time. It was formulated as a telephone and internet-based retail bank with headquarters in Leeds, West Yorkshire. It has two all centres in Strouton (leeds) and Hamilton, South Lanarkshire, Scotland.

By 1991 they had over 100,000 customers. In 1992 it became part of HSBC, following the acquisition of Midland bank. By 1993 they had over 250,000 customers. And by 1995, they had over 500,000.

They began trials of internet banking in 1997, launching fully in 1998. In 1999 they launched their text message banking, and by 2001 they announced an offset mortgage product.

Other milestones include:

  • 2004: launched the first directory, a service whereby additional services were added to current accounts such as free text message banking, annual travel insurance, mobile phone insurance.
  • 2004: Internet banking plus, whereby information is taken by third party Internet Banking from the bank's other accounts.
  • 2006: Monilink - mobile home banking
  • 2007: first bank to offer basic fee for financial transactions

They employ over 3,000 people and have 1.2 million customers. About 750,000 of these customers use the internet.

Remortgages offered through First Direct

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

Variable mortgages - currently benefit from a discounted variable rate for three months, the rate then reverts to the standard variable rate for the rest of the mortgage term.

Fixed rates - a fixed rate mortgage means that the rate is set for an agreed period of time. This means that if rates rise your mortgage rate will stay the same. However, you need to keep in mind that 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, you will be charged an early repayment fee.

Offset rates - you pay First Direct's discounted variable rate for three months, followed by the standard variable rate for the rest of the 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.