Three high street lenders have now reintroduced ‘high LTV’ products in the last three weeks, meaning people with 10% deposits will benefit from more choice, according to an investigation by financial information provider, Defaqto.
HSBC, Nationwide and Metro Bank all brought back offerings for people who need to borrow up to 90% of their property’s value.
When the lockdown was put in place following the Covid outbreak, many lenders pulled their ‘high loan-to-value (LTV)’ products which allowed people with deposits of 5% or 10% – typically first-time buyers – to take out a mortgage.
Some lenders returned, only to back out again, leaving would-be borrowers confused and frustrated over whether their homebuying plans would materialise.
Defaqto said, at the beginning of this week, there were 28 products for borrowers who needed a higher LTV.
Katie Brain, Banking Expert at Defaqto, said: “It can be really hard to save for a deposit for a home and high LTV mortgages are often the only way a first-time buyer can get on the ladder.
“The Stamp Duty Holiday may help first-time buyers but without the finance, home-ownership will be out of reach for most.
“It is encouraging to see lenders returning to the market and new products coming out for those with small deposits. We are seeing many come onto the market for only a few days and so borrowers will need to act quickly to secure these deals.”
Warning
Defaqto said it was good news that lenders were returning but warned many were still very cautious. As such, it said, many products were only being introduced for a few days and were then pulled from the shelves.
For this reason, it can be helpful to speak to a broker or intermediary who has access to the whole of the mortgage market.
“Buying a home is a huge investment and not without risk, anyone who is looking to take out a mortgage should speak to a professional adviser before committing,” Brain added.
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