Mortgage

Borrowers needing a higher LTV benefiting from lower mortgage rates

The Bank of England’s Credit Conditions Review shows that the mortgage market is not as gloomy as it may seem for some borrowers, despite the expected base rate rise next month.

Their figures show that higher loan to value (LTV) mortgage rates are still going down, so borrowers looking to buy with only a 10% deposit will currently find the market in their favour.

Whilst overall mortgage rates are on the rise due to the expected base rate increase in May, the average household interest rate in March was 2.21% for a two-year fixed 90% LTV mortgage according to Moneyfacts. This is a reduction of 12 basis points since August 2017.

Lenders working hard to attract borrowers in challenging marketplace

Mortgage Brain data shows that while representing the smallest product type by volume, 90% plus LTV mortgage products have shown the strongest performance over the past two years – an increase of 106% in total, from 271 in March 2016, to 559 at the beginning of March 2018. It seems that lenders are keen to offer a helping hand to those unable to raise large deposits, especially first-time buyers.

Platform, the intermediary mortgage brand of the Co-operative Bank, has reduced rates on select 85% and 90% LTV two and five-year fixed rate mortgages, with five-year fixed rates starting from 2.34% up to 90% LTV, with a £1,499 fee.

Paul Norcott, head of mortgages and insurance at The Co-operative Bank, said: “We continually review the products and rates we have available to ensure we’re listing mortgages our broker partners can recommend to their customers; especially those who want a mortgage that will help them take their first step on to the property ladder – we know that higher LTV mortgages are often what first-time buyers are looking for.”

Make the move now to benefit from low rates

Other lenders are following suit. Accord has launched seven new two-year discounted standard variable rate (SVR) mortgages available on up to 95% LTV. Virgin’s range of 90% LTV residential mortgage products have also been launched offering reduced rates; a two-year fix at 90% LTV at 2.25% with no product fee, and a three-year fix at 90% LTV at 2.18% with a £995 fee.

Leek United Building Society has also expanded its product range with two competitive five-year fixed rate deals. The first is fixed at 2.59%, with a £100 application fee and £895 product fee, while the second is fixed at 3.29% with no application or product fees. Both products are available up to 90% LTV.

With the current challenges in the mortgage market, there is no guarantee that these deals will be around long-term, so the advice for those seeking a 90% LTV deal is to make the move now.

Self-certified Sophisticated Investor

Please read

I declare that I am a self-certified sophisticated investor for the purposes of the restriction on promotion of non-mainstream pooled investments. I understand that this means:

I am a self-certified sophisticated investor because at least one of the following applies:

I accept that the investments to which the promotions will relate may expose me to a significant risk of losing all of the money or other property invested. I am aware that it is open to me seek advice from someone who specialises in advising on non-mainstream pooled investments.

High Net Worth Investor

Please read

I make this statement so that I can receive promotional communications which are exempt from the restriction on promotion of non-mainstream pooled investments. The exemption relates to certified high net worth investors and I declare that I qualify as such because at least one of the following applies to me:

STAY AHEAD OF THE MARKET

Sign-up for first access to new developments and exclusive property investment opportunities.

We send limited and targeted emails on new launches and exclusive deals which best fit your areas. We are trusted by over 30,000 active buyers as their source for new stock.

  • New property developments
  • Professional market reports
  • Property deal alerts
  • Development updates

FIRST FOR NEWS AND KNOWLEDGE.

Receive trending news straight to your inbox and stay up to date on all of the property market trends and advice.

Established since 2005 we are a leading voice of authority and commentary on the UK property market. Our news is trusted by Apple News & Google News.

  • UK housing market
  • Mortgage & money
  • Buy-to-let landlords
  • Guides & advice

Talk to us

Speak to our UK property experts today:

 

+44 (0) 333 123 0320

Open from 9am-6pm GMT

 

+852 6699 9008

Open from 9am-6pm HKT