Slight rate drop for high LTV borrowers but product choice remains ‘patchy’ at best
10 January 2018
Average rates drop below 4% for those with 5% deposit however they still pay two-thirds more for their mortgage each year.
November’s increase in Bank Base Rate feeds through to 75% LTV mortgage rates but lenders opt not to add rate increases to 95% LTV products.
Real product availability for 95% LTV now suits purchasers buying at average first-time buyer prices.
The end of 2017 brought better news for first-time buyers in terms of Government support for affordable housing and increasing supply, plus cuts to stamp duty levels for those purchasing up to £300k, and the latest findings from the quarterly AmTrust Mortgage Loan to Value (LTV) Tracker also show improvements for those first-timers with smaller deposits as average interest rates fell slightly and the average first-time buyer house price stayed level.
The Bank of England’s Monetary Policy Committee (MPC) increased Bank Base Rate (BBR) in November last year however, while average products rates for 75% LTV mortgages did increase by close to the full 25 basis points, those for 95% LTV mortgages edged down.
December’s Autumn Statement also saw stamp duty cut completely for first-timer buyers up to a threshold of £300k, and AmTrust believe lenders might be responding to this news by keeping rates for low-deposit borrowers down in order to benefit from any greater interest in purchasing from first-time buyers.
However the AmTrust Mortgage LTV Tracker continues to show that, while the rate differential between 75% and 95% LTV mortgages has narrowed, those with small deposits are still continuing to pay on average two-thirds more for their mortgage products annually, than those who have been able to put down a 25% deposit. A recurring theme of all LTV Trackers throughout 2017.......
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