There are now three times as many mortgage options for those who have a five per cent deposit than before the Help to Buy mortgage guarantee scheme was launched, new figures from the Genworth Mortgage Loan to Value Tracker have found.
Before the introduction of the scheme there were 43 mortgages available at 95 per cent, while there are now 132, and it is was the only mortgage range to grow in the first two months of this year. The availability of 75, 80, 85 and 90 per cent LTV mortgages has fallen since December.
The best buy rate for a two year fixed mortgage at 95 per cent LTV has risen slightly at the start of 2014 but has still improved more than twice as much as any comparable mortgage rate under Help to Buy 2. The best buy rate at 95 per cent has fallen by 79 basis points (bp) since September from 5.48 per cent to 4.69 per cent.
Simon Crone, Genworth vice president – Commercial Mortgage Insurance Europe, comments: “The combination of commercial appetite, government support and private insurance take-up has transformed the outlook for first time buyers and reignited competition for low deposit mortgages. Just six months ago, a 5 per cent deposit left potential buyers stranded with very few options to choose from. But a tide of new products has brought confidence flooding back and has already had a visible impact on the number of loans approved.
“Whether or not borrowers focus on the Help to Buy product range or look beyond it for more options, the scheme’s galvanising effect means there are now far more choices and far better rates at 95 per cent LTV to end their wait for a loan. High LTV lending is good for the economy and – with improved funding markets and government support – it can become a powerful tonic to support the wider recovery.”
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