AmTrust Mortgage Loan to Value (LTV) Tracker
29 July 2019
75% LTV first-time buyers get access to six times as many products as their 95% LTV counterparts
- Big increases in first-time buyer deposit requirements, loan size and mortgage payments as average property price shifts significantly.
- Average rates continue to drop for both 75% and 95% LTV borrowers but price increases wiped out any benefit.
- Those first-timers with only 5% deposits continue to pay close to 50% more in monthly/annual mortgage payments.
- Product numbers rise for 75% LTV but decrease for all 95% LTV options. Over six times as many products available for 75% LTV borrowers as lenders seek out less risky first-time buyer business.
Mortgage insurer AmTrust’s latest Mortgage Loan to Value (LTV) Tracker has today revealed a significant increase in the cost of the average property bought by first-time buyers since the last iteration of the Tracker, resulting in raised deposit levels, loan amounts, and monthly and annual mortgage costs.
According to the latest UK Finance figures, the average first-time buyer house bought in May this year was over £200k at £214,623, meaning those who wanted to put down a 25% deposit needed over £50k, and those with a 5% deposit had to find over £10k.
This meant that the monthly mortgage cost disparity for average first-time buyers seeking average-priced homes continues to be significant, with 95% LTV borrowers continuing to pay close to 50% more for their mortgages than those at the 75% LTV level.
This, at a time, when average mortgage rates continue to fall. In a first for the Tracker, the average 95% LTV mortgage rate dropped below 3% to 2.95%, while the average 75% LTV rate dropped again from 1.68% to 1.65%. The rate differential continued to narrow, down from 1.35% in Quarter 1 this year to 1.3% now.
Those with smaller deposits pay (on average) £962 per month/£11,544 each year, while those with 25% deposits pay (on average) £655 per month/£7,860 per year. This is also a significant increase on the Quarter 1 results, especially for 95% LTV borrowers who have seen costs rise by over £150 per month and close to £2k per year....
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