Big rise in mortgage for first-time buyers

Jun 28, 2017
Big rise in mortgage for first-time buyers

The number of 95% loan-to-value (LTV) mortgage deals – where first-time buyers only have to stump up a 5% deposit – has increased four-fold since June 2012.

Data from Money facts reveals there are 288 95% LTV deals on the market this month, up from 251 this time last year and quadruple the 63 deals five years ago.

And the rates are also becoming more competitive with the average five-year fix in this category standing at 4.57%, down from 4.63% this time last year. In the two-year fix category, there’s been a small rise in rates from 4.15% last June to 4.18% now due to the Help to Buy Mortgage Guarantee scheme being removed.

However, rates are still competitive as the average rate two years ago was 4.70%. The current best buy deal is from AA Mortgages, priced at 3.82% for two years with no product fee and an incentive package of free valuation and £400 cashback. However, first-time buyers able to put down a bigger 10% deposit can secure much better deals, such as an average 2.75% on a two-year fix 90% LTV deal and 3.37% on an average five-year fixed 90% LTV deal.