If you’re a first-time buyer with only a 5% deposit, well guess what? You’re in luck! You will now have access to over 34 mortgages to choose from, with more to come after the Easter weekend.
Now if you’re stuffing your face with easter eggs, you might be best putting down the bowl and paying close attention, this Wednesday, TSB will resume selling 95% Mortgages to First-Time Buyers and home movers, on loans of up to £500,000. However, the rates have yet to be confirmed, and this scheme will not be available on flats or new-build properties.
It was the 17th March when Rishi Sunak announced in his budget talk that many lenders will be relaunching a 95% mortgage scheme to help home movers, and most of all the first-time buyers get onto the property ladder after a very unpredictable year.
Low-deposit mortgages disappeared almost entirely last spring due to the on-going coronavirus pandemic, but 2021 brought new signs of life and encouraged first-time buyers to consider applying for the 95% Mortgage scheme, even if it meant buying a home that isn’t classed a new-build.
Anyway, here at MortgagesRM, our mortgage advisor, Stephen Kerrigan will take us on a closer look on the 95% Mortgage scheme and offer advice on whether buyers should make their move now or hold fire for the time buying, after all, buying a house is a huge life commitment.
It might seem a lifetime ago since then, but back in March, Chancellor Rishi Sunak pledged that his new 95% Mortgage Scheme that is due to launch this month (April 2021) will give lenders the confidence to relaunch their 95% deals and help first-time buyers get onto the property ladder.
Of course, this was going to start a ‘Rate War’ with some of the UK’s biggest lenders, including Barclays, HSVC, Lloyds Bank, and NatWest likely to follow suit and offer their support.
The 3.99% fixed price for five years looks high on paper, but it is likely that first-time buyers won’t immediately see significantly lower rates when other lenders join in. However, the recent return of 90% mortgages can give us an idea of what to expect.
When lenders first returned to the 90% market in December, the best rate on a two-year fix was 3.24% and we saw major lenders ‘bunch’ their deals together by offering near-identical rates. Since then, the number of deals has more doubled and the best rate has fallen to 2.99% – although that’s still 1.4% higher than the best rates seen before the pandemic.
The 95% Mortgage scheme is likely to be very popular with home movers. However, we recommend that first-time buyers who aren’t in a hurry may be better holding off to see what happens when the mortgage scheme launches.
It is highly unlikely that borrowers will see rates plummet to anything like those before the pandemic began, but with the extra competition, it may result in some slightly cheaper deals. The main thing is don’t worry, even if we don’t see lower rates just yet, it may be that lenders compete in other ways such as, offering fee-free mortgages or offering cashback incentives.
If you are a First-Time Buyer thinking of applying for a mortgage in 2021, well it’s important to do your research before rushing in, and here at MortgagesRM – Doncaster Fee Free Mortgage Advisor, we can guide you through the process and apply for a home loan.
First of all, check out our mortgage calculator to find out how much you might be able to borrow and what your monthly repayments might be, and finally, all our guides for applying for a mortgage will help you lock in a deal and take that big step towards buying your first home.
So, as we come out of Lockdown – get Locked in with the right deal that’s best for you, and start your future the less stressful way.