• Mortgage Tree

First-time buyers with a 5% deposit benefit from tumbling rates

Rates on mortgages for first-time buyers with small deposits have fallen ‘dramatically’ over the last year, according to the latest analysis.



Research by Moneyfacts.co.uk has revealed average interest rates on two-year fixed mortgages for borrowers with deposits of only 5% are currently at 3.30% which compares to 4.19% in October 2017.


It will provide a glimmer of hope for first-time buyers who are struggling to get onto the property ladder because of difficulties saving a big enough deposit.

Indeed, the analysis by Moneyfacts revealed the rates on mortgages with 5% deposits – known as 95% loan-to-value (LTV) mortgages – had fallen by so much they were nearly as cheap as the rates for less risky 90% mortgages.


According to Darren Cook, finance expert at Moneyfacts.co.uk, mortgage providers were offering such good rates on riskier mortgages because they wanted to secure the business of first-time buyers – a sector which is currently considered the lifeblood of the mortgage market.


First-time buyer numbers have been increasing according to figures from the banking trade body, UK Finance, which attributed the rise to incentives to help people onto the property ladder, such as Help to Buy.


Cook said: “This is fantastic news for potential first-time buyers who are looking to find their first step on the housing ladder.”


Caution

He added: “However, even though mortgage rates at the 95% LTV tier are falling, it may not be that simple; since the financial crisis, the Financial Conduct Authority (FCA) has introduced clear affordability measures that mortgage providers must follow, so potential first-time buyers will still need to jump through several affordability hoops before they find themselves on the property ladder.”


Article by Kate Saines for www.whatmortgage.co.uk


#moneyfacts #firsttimebuyers #mortgageadvise #mortgagebroker #mortggaeadvisor

Stay Connected...

Home

Mortgage Calculator

Mortgage Tree - Mortgage Advisors York - Services & Standards

Mortgage Tree offers a nationwide mortgage broking service from our base near York, North Yorkshire. We specialise in mortgages and insurance. Whether you are a first time buyer or you are a buy to let investor with multiple properties, Mortgage Tree will ensure that you get the best products available.

We are a Whole Of Market broker which means that we will choose the best, most suitable mortgage for you from the hundreds available on the UK mortgage market. Our network also gets special discounted deals from lenders available only to our network.

We also provide insurance cover that will give you & your loved ones a blanket of protection that is so vital. We will endeavour to give you the best service that we can at all times.

Mortgage Tree is an appointed representative of Julian Harris Mortgages ltd which is authorised and regulated by the Financial Conduct Authority. Our FCA no. 304155

The Financial Ombudsman Service (FOS) is an agency for arbitrating on unresolved complaints between regulated firms and their clients. Full details of the FOS can be found on its website at www.financial-ombudsman.org.uk

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE. BUY TO LET (PURE) AND COMMERCIAL MORTGAGES ARE NOT REGULATED BY THE FCA.

Legal 

© 2020 Mortgage Tree | Built by Elle Nelson Design