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First-Time Buyers to be offered more Choice

The UK’s leading banks and building societies are to launch a bigger range of deals requiring 10% deposit.

Good news comes in all shapes and sizes

As more good news comes in all shapes and sizes at the moment, first-time buyers have more choice of mortgage deals after several banks and building societies have launched 90% home loans this week.

During much of last year, 90% loan-to-value deals requiring potential first-time buyers with a 10% deposit were thin on the ground, however, in recent weeks more lenders have stepped back into this market.

On Tuesday, a three-year fixed rate 90% deal priced at 3.4% and with a £199 upfront fee was launched by Doncaster building society. It also rolled out a two-year fix at 85% LTV with a rate of 2.6% that has no fees. That same day, the building society also launched a 90% LTV five-year fix at 3.45% with an application fee of £199 and a completion fee of £800.

HSBC has trimmed the rates

Some rates have been trimmed of its 90% deals: One of its two-year fixes has been cut by 0.15% to 3.24%, while a five-year fix is down by just 0.1%. However, HSBC has also made changes to its rules on “variable pay”, enabling income from commission and overtime, in addition to quarterly, half-yearly or annual bonus payments, to be used to support affordability. The most recent payment must have been received in 2021.

On Thursday, Metro Bank overhauled its higher LTV mortgages. At 90% LTV, it has introduced new two- and three-year fixes priced from 3.19%. Its maximum loan size has been increased to £675,000 from £540,000.

Stephen Kerrigan of MortgagesRM has said:

Options for those with a 10% deposit have improved greatly over recent months. However, this means there is greater choice for first-time buyers in this area of the market.

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