{"id":5026259,"date":"2019-10-14T14:15:21","date_gmt":"2019-10-14T13:15:21","guid":{"rendered":"https:\/\/www.buyassociation.co.uk\/?p=5026259"},"modified":"2023-11-07T11:43:07","modified_gmt":"2023-11-07T10:43:07","slug":"slower-rate-increases-for-first-time-buyers-with-bigger-deposits","status":"publish","type":"post","link":"https:\/\/www.buyassociationgroup.com\/en-gb\/2019\/10\/14\/slower-rate-increases-for-first-time-buyers-with-bigger-deposits\/","title":{"rendered":"Slower mortgage rate increases for first-time buyers with bigger deposits"},"content":{"rendered":"

First-time buyers with larger deposits are in a significantly better position than those without, as the cost of a two-year fixed rate for those with a 10% deposit is rising at a slower pace than for those with less capital, according to Moneyfacts.co.uk.<\/strong><\/p>\n

While the average two-year fixed-rate for first-time buyers<\/a> (FTBs) needing a 95% loan-to-value (LTV) mortgage has increased by 0.05% to 3.28% since September, FTBs with a 10% deposit have only seen an increase of 0.01%, taking the average rate for a 90% LTV mortgage to 2.65%. This means first-time buyers with a substantial 10% deposit can get access to rates 0.63% less than their 95% LTV borrowing counterparts.<\/p>\n

At present, 95% LTV rates are rising faster than any other tier, with the rate gap between 95% and 90% LTV loans likely to widen even further over the next few months. Darren Cook, finance expert at Moneyfacts, said: \u201cIt appears that mortgage providers may be factoring in a larger proportion of default risk into rates at higher LTVs, where, among other things, competition and lower wholesale funding costs seem to be benefiting borrowers with a greater equity stake in their property.<\/p>\n

\u201cThe difference in average rates between 90% and 95% LTVs has historically always been greater than differences in average rates between LTVs lower down the tier scale, so it is always worthwhile for a potential FTB to try to raise an additional deposit and attempt to step down the ladder<\/a> to find a mortgage at lower interest rates.\u201d<\/p>\n

Falling rates for lower LTVs<\/h4>\n

Over the past six months, borrowers looking at lower LTV rates will have actually benefited from falling (not increasing) rates unavailable to 95% LTV buyers; at 85% the rate has dropped by 0.02%, at 80% by 0.06% and at 75% LTV again by 0.02%. First-time buyers that can afford to put down a heftier deposit<\/a> could benefit from the falling two-year fixed rate at 60% LTV, which has dropped by 0.04% to 1.80% and is 0.11% lower than in April this year.<\/p>\n

The good news for first-time borrowers restricted to 95% LTV mortgages is that there is a choice of 107 two-year fixed-rate mortgage products, of which 98 offer 35 or 40-year terms and a massive 94 products offer loans up to a maximum age of 75 years and above at the end of the term.<\/p>\n","protected":false},"excerpt":{"rendered":"

First-time buyers with larger deposits are in a significantly better position than those without, as the cost of a two-year fixed rate for those with a 10% deposit is rising at a slower pace than for those with less capital, according to Moneyfacts.co.uk. While the average two-year fixed-rate for first-time buyers (FTBs) needing a 95%… Read more »<\/a><\/p>\n","protected":false},"author":3380,"featured_media":13660,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[26],"tags":[73],"acf":[],"_links":{"self":[{"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/posts\/5026259"}],"collection":[{"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/users\/3380"}],"replies":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/comments?post=5026259"}],"version-history":[{"count":1,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/posts\/5026259\/revisions"}],"predecessor-version":[{"id":6098185,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/posts\/5026259\/revisions\/6098185"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/media\/13660"}],"wp:attachment":[{"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/media?parent=5026259"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/categories?post=5026259"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/tags?post=5026259"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}