Private Finance comments on Mortgage Lenders and Administrators Statistics – 2019 Q2
Simon Checkley, Managing Director at Private Finance, comments on Mortgage Lenders and Administrators Statistics – 2019 Q2.
The full Mortgage Lenders and Administrators Statistics – 2019 Q2 document can be read here.
Simon Checkley said:
“The popularity of mortgages with a loan-to-value (LTV) exceeding 90% are at their highest point since the 2008 financial crash. These products have been vital in enabling those with smaller deposits to purchase their first home and are therefore a key driver in creating a new generation of homeowners.
“Those concerned that borrowers might be overstretching themselves should take comfort in the fact that while high LTV products do come with a slight premium, in today’s low rate market, they’re incredibly affordable. The average rate for a 95% LTV two-year fixed rate product is now just 2.95%, nearly a whole percentage point cheaper than at the same time last year.*
“It’s always preferable for borrowers to opt for a product at the lowest LTV possible to secure the best rate and minimise the amount of interest repaid. However, it’s not always realistic to save a hefty deposit, so many prospective first-time buyers will be encouraged by the flurry of high LTV products that have launched onto the market, giving those otherwise locked out of homeownership their first step onto property the ladder.”
*Bank of England quoted household interest rate data – monthly interest rate for 2 year fixed 95% LTV – Aug 2019: 2.95%, Aug 2018: 3.61%.
Kindly shared by Private Finance