Last week my colleague Andrew Beer tried to raise some Christmas cheer for first-time buyers. Although deposits for house prices are high, we are seeing a shift in the loan-to-value percentage that lenders are prepared to offer.
While first-time buyers are working hard to raise the money up front, lenders are beginning to offer higher proportions of the property value as a loan. The more you can borrow, the less deposit you need.
True, many of these higher LTV mortgages come with restrictions. But the picture is definitely improving. Rates on these products are getting more competitive too.
Woolwich is a good example. It has recently extended its range of fixed-rate mortgages to 90% loan-to-value. This still leaves a buyer needing to find 10% deposit. But if that can be done, the 3-year fixed mortgage comes with a rate of 4.99%. What’s more, there are no fees to set it up.
As for restrictions, Woolwich set a minimum loan amount of £50,000 and a maximum of £500,000.
Products like this are not just important for first-time buyers. We are convinced at Limetree that improving the first-time buyer market is key to getting the whole property market active again. Woolwich’s latest move is a positive one.
I hope that this brings a bit of festive cheer not only to first-time buyers but also to everyone hoping that the mortgage market improves for them. If you need any advice, or to find the best mortgage deal for you, get in touch with Limetree.