In this day and age, 95% mortgages are few and far between unfortunately as lenders are still cautious about how much they lend and who qualifies for the higher mortgages. Now, a standard deposit amount is normally a minimum of 10% i.e. 90% mortgage, with lenders offering preferential rates and higher loans to people with larger deposit i.e. 15, 20, 25%+. However, despite recent economic issues, there have been several lenders throwing a lifeline to borrowers by increasing the maximum allowed loan to value. Accord mortgages are the latest to offer 95% Home Mortgages, meaning people are able to get a mortgage with them with just 5% deposit potentially.
What Are The New Rates?
Here is a roundup of the new products including 90% and 85% LTV offerings:
- A five-year fixed-rate deal of 6.35% at 90% LTV, which comes with a £995 fee, £500 cashback and standard valuation for house purchase
- A five-year fixed-rate offer of 6.71% at 95% LTV, which comes with a £995 fee, £750 cashback and standard valuation for house purchase
- A Help to Buy two-year fixed rate of 6.10% at 60% LTV, which comes with a £995 fee and £500 cashback and standard valuation
- And a two-year discounted standard variable rate loan of 4.19% at 85% LTV, which comes with a £995 fee and £500 cashback and standard valuation for house purchase and remortgage
Accord Mortgages managing director Jeremy Duncombe commented on the new rates and products, saying:
“Our sensible and phased return to market means we’re now in a position to start lending again with a wider range of mortgages, which I’m sure will be welcome news to brokers and their clients, particularly those with the smallest deposits. As a responsible lender, we’ve carefully monitored the market and maintained our currently excellent service levels to make sure brokers continue to receive the quality of service they expect from us.”
What Do The Mortgage Experts Say About 95% Home Mortgages?
Content and communications manager at Oportfolio Mortgages in Southwest London, Louis Mason is a big fan of 95% mortgages returning:
“This really made me happy this morning. I always get excited when lenders start regaining confidence in the market. This reintroduction of 95% mortgages, although the rates are pretty high, is a good step in the right direction for Accord and will really help out a lot of people.
Every brokerage will tell you that they get a lot of first-time buyers who are wanting to purchase their first home but struggle with high deposit requirements. For a generation where people are renting for longer, it becomes more and more difficult for people to save enough deposit to meet lender’s strict requirements and a lot of people are losing hope that they will ever be able to buy.
In the late 80’s my parents bought their first property together in their early 20’s (22 and 24) with no help from anyone else. The bank had no issues with lending to them as they both had stable careers and within a couple of years, they upsized to a four-bedroom family home. Now, due to lender affordability criteria becoming stricter and the cost of living increasing, the average age of a first-time buyer in this country is 34!
As more lenders ‘hopefully’ start introducing 95% or 90% mortgage products, first-time buyers should start to see that they are able to save enough money for deposit. Or if they are falling short at all, a smaller gifted deposit from family could make a big difference. I’m looking forward to us being able to have these positive conversations with clients moving forward.”