1st Time Buyers with small deposits get pick of the deals
Mortgage interest rates for this market have plummeted to a record low
Data released today has revealed two-year fixed-rate deals for borrowers with 5% deposits who therefore need a 95% loan-to-value (LTV) mortgage are averaging at 3.54% – a sharp decline on the 6.52% typical rate 10 years ago.
Meanwhile,home buyers with a 10% deposit, who require a loan of 90% of their property’s value, are benefiting from having the pick of the fixed-rate bunch.
According to Moneyfacts.co.uk, which has compiled the data, the number of fixed-rate deals for these borrowers is at its highest on record with more than 650 deals available, compared to just over 100 in December 2008.
Interest rates on 90% LTV mortgages have also plunged from 6.5% in 2008 to 2.7% today.
Lifeblood of the market
Darren Cook, finance expert at Moneyfacts, said: “With first-time buyers being the lifeblood of the housing and mortgage market, it is encouraging to see that potential new homeowners now have a greater number of mortgage options available at the higher LTV tiers, as well as lower initial interest rates in the two-year fixed sector, to choose from.”
Meanwhile, for borrowers who have larger deposits it’s a different story. Moneyfacts’ data shows the average two-year fixed mortgage rate for borrowers who need a 60% LTV have gone up by 0.12% year-on-year. Even those borrowing 85%, who have 15% deposits, have seen rates rise by 0.21%.
Cook thinks the reason for this is because lenders are keen to grab the attention of first-time buyers and are entering into some ‘healthy competition’ in their bid for this market. For the first-time buyers, the advice is to ensure they scour the market for the best deal.
Cook added: “Prospective first-time buyers should start to consider their options and make a comparison of mortgage products that may best suit their requirements, as choosing a good deal could save sums in the long run.
Article sourced from an article by Kate Saines for What Mortgage on 10th December 2018 . Original full article can be viewed by clicking link below
(Link above opens in seperate window)
Mc Daid Mortgages do not accept responsibility for any advice provided or opinions expressed with this article. This is for information purposes only
Your home may be repossessed if you do not keep up repayments on your mortgage
Leave a Comments