A 95% mortgage, or also known as a 95% LTV Mortgage to some people, is a type of mortgage to purchase a property with a small deposit, such as a 5% deposit to be exact. However, your deposit is the amount of money that you need to put into the mortgage to make up 100% of the final purchase price.
Chancellor, Rishi Sunak mentioned in the budget briefing earlier this month that Santander, Barclays, HSBC, and Halifax would offer the mortgages ‘from next month’, while Virgin Money would follow shortly afterwards. However, Highstreet bank NatWest will not follow and offer these types of mortgages. The company mentioned on their website that:
Mortgages with low deposits are very risky for mortgage providers than those where the First-Time Buyer places a higher deposit.
The amount of deposit that homebuyers can put down for a mortgage becomes the equity that you have in the property once you’ve paid for it. Therefore, the more equity you have in the property, the more likely you are to be able to repay your mortgage in full if your property loses value. NatWest have recently confirmed that they can only offer mortgages up to a maximum of 90% LTV.
NatWest didn’t mention when they would make 95% Mortgages available again. However, Stephen Kerrigan, mortgage advisor in Doncaster is constantly reviewing their mortgage products and rates, so maybe in the near future, 95% Mortgages will make a comeback at NatWest.
NatWest currently offers LTV of 90% for a mortgage. So, if you’re interested to get a 90% mortgage, you would need to have a deposit of at least 10% of the agreed purchase price of the house you wish to buy.
Hey First-Time Buyers, we know it can be pretty daunting when you are looking to buy your first home. There are lots of things to think about and consider, and that’s a scary thought. But don’t worry, you can call or email Stephen Kerrigan, Mortgage Advisor at any time – he will lead you on the right path to buying your own home.