AmTrust Mortgage Loan to Value (LTV) Tracker
11 October 2018
LTV Tracker reveals increased product choice for first-timers
Product numbers across all reviewed options increases for the first time since the LTV Tracker was established.
Average rates drop for those with only 5% deposit but significant disparity in product options for those with 25% continues.
Cost of monthly mortgage payments for first-time buyers drops back to October 2017 levels.
Product numbers for those purchasers with both 5% and 25% deposit levels have increased across all mortgage options for the first time since the LTV Tracker was introduced, however those with smaller deposits continue to pay over 50% more each month than their larger deposit counterparts.
These were among the latest findings from the quarterly AmTrust Mortgage Loan to Value (LTV) Tracker, which reviews the average monthly mortgage payments for first-time buyers on average loan levels, comparing loans for those with a 5% deposit to those with 25%, and also looks at the product availability for first-timers.
Despite two increases in Bank Base Rate (BBR) over the last 12 months, product pricing has stayed consistent with this quarter’s LTV Tracker showing a significant 34 basis points drop in the average rate for a 95% LTV mortgage.
Average rates for those with a 25% deposit only increased by 1 basis point up to 1.75% this quarter from 1.74% back in July. The rate differential between 75% and 95% LTV loans has therefore narrowed from 2.21% last time to 1.86%, showing a much more competitively-priced high LTV sector than in recent years.
However, first-timers with only a 5% deposit can still expect to pay over 50% more each month for their loans. Those with smaller deposits pay (on average) £821 per month/£9,852 each year, while those with 25% deposits pay (on average) £527 per month/£6,324 per year.
AmTrust believes that, as the year comes to a close, there will be greater competition in the high LTV sector as lenders seek to secure increased business from first-timers and greater margin on their loans. Even with further increases to BBR, product pricing for lower-deposit mortgages may sustain their competitiveness as lenders look to increase business share in this part of the market...
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