by Mark Johnston
First Time Buyers Start to Gain From Mortgage War.
It now seems that some lenders are slowly starting to offer more competitive deals to those with smaller deposits, which is good news for many first time buyers.
Therefore, there are now signs that innovative new deals are coming to the market to help people get their foot on the housing ladder.
Yorkshire Building Society the UK’s second largest mutual, has shaved 0.35 per cent of its mortgage deals. This does include a deal for borrowers with just 10 per cent deposit or equity in their home. These borrowers can now access a two year fixed arte of 3.79 per cent , which is one of the most competitive rates now available at this particular loan to value.
Although Barclays has not reduced the cost of the fixed rate deals offered to those borrowing 85 per cent or 90 per cent of their property’s value, it has announced details of its new Family “Springboard” mortgage, which will enable first time buyers to get a mortgage with just a 5 per cent deposit. This is provided their parents have savings (equivalent to another 10 per cent) which are deposited in a linked Barclays account.
Rachel Springall, spokeswoman for financial information website Moneyfacts, said: “The majority of low rates on the market today are aimed at customers who can raise a high deposit, such as 40pc, so these first-time buyer packages will be much welcomed.”
Cambridge Building Society has reduced its rates by up to 0.7 of a percentage point for purchases. The largest cut is to the two year fixed rate at 90 per cent loan to value (LTV) which has been cut by 0.7 of a percentage point from 5.19 per cent to 4.49 per cent, while thier five year fixed rate deal charges 4.99 per cent. Both loans are available up to a maximum value of £300,000 and charge fees of £999.
Leeds Building Society has also removed its completion fee of £800 and replaced it with a free standard valuation up to £335 and is offering free legal services for standard remortgages.
The society’s two year fixed rate products are available at current rates of 2.54 per cent up to 75 per cent loan to value (LTV), 2.94 per cent up to 80 per cent loan to value (LTV) and 3.54 per cent up to 85 per cent loan to value (LTV).
All tiers of the product allow 10 per cent capital repayments each year without penalty, have no higher lending charge and a booking fee of only £199.
Ray Boulger of John Charcol said: “Lenders like the safety of lending to people with 40 per cent equity in their homes, but if the rates fall too far they are not making much profit. This is when they start eyeing the bigger profit margins on offer in the first time buyer market and decide to compete there as well”.
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