by Mark Johnston
Nationwide Extend 95% Mortgage Range.
Record low mortgage rates may abound, but home owners are still struggling to move up the property ladder.
It appears that in the current climate it is not just first time buyers that are facing problems, many home owners are unable to move up the property ladder due to failing equity in their property.
So while the 95 per cent mortgage market has eased slightly in recent months, the choice is much more limited than before the housing market downturn began.
However, it appears that home movers with little equity in their property are now being offered a new range of 95 per cent mortgages, provided they commit to making regular savings for at least six months.
Nationwide building society is extending its Save to Buy mortgage sceme, which was originally only available to first time buyers to homeowners.
Figures from the building society show that approximately 25,000 first time buyers have already opened ‘save to buy’ savings accounts since their original launch in May 2011.
The building society believes that by widening their ‘save to buy’ scheme to home owners it will in turn help to ease the market for home owners struggling with equity.
This particular scheme means that home owners will be able to take out a mortgage with a deposit of just 5 per cent providing they put at least £50 a month into a linked savings account with the building society for six months.
As appealing as this sounds it is also worth noting that opening a ‘save to buy’ savings account does not automatically guarantee the account holder acceptence for a ‘save to buy’ mortgage as like all other mortgages they are of course subject to eligibility, underwriting and criteria.
Tracie Pearce, Nationwide’s head of mortgages, said: “Save to Buy for home movers gives borrowers the assistance they need to buy their next home. Thus helping borrowers move up the property chain can help free up homes lower down the chain for those borrowers looking to get on the first rung of the ladder.”
Mark Harris, the chief executive of mortgage broker SPF Private Clients, said extending the scheme made sense, as it was not just first time buyers who were struggling.
The Nationwide’s current Save to Buy mortgage is either a five year fixed rate deal charging 5.99 per cent or a three year fixed rate deal charging 5.69 per cent both deals come with fees of £900. However, the lender is also currently offering a three year fixed rate of 5.99 per cent which is fee free and also a five year fixed rate of 6.19 per cent which too is fee free.
Nevertheless, mortgage experts do still advise that borrowers should ensure they compare what is on offer with the rest of the market and not assume they are getting the best deal and they should therefore not to assume that the Nationwide loan is the most competitive for their circumstances.
Story link - Nationwide Extend 95% Mortgage Range.
Related stories to : Nationwide Extend 95% Mortgage Range.