As property prices have become more expensive and the ability to save larger deposits has become more and more difficult, an increasing demand for higher loan to value mortgages has been seen across the mortgage market. The dissolution of the Help to Buy scheme this year has also meant that first time buyers who were previously able to put down as little as 5% deposit themselves and borrow an extra 20% – 40% equity loan from the government are left trying to either find 10%+ deposit or a lender who will offer 95% mortgages. Hanley building society are one of these lenders, offering a new fee free 95% mortgage product.
Fee Free 95% Mortgage
Haley Economic or Hanley Building Society as it is more commonly know is a building society based in Stoke on Trent, offering a wide range of different mortgage products. As part of the PRIMIS mortgage network, we at Oportfolio Mortgages have access to all of Hanley’s current mortgage offerings. A communication issued today by Hanley announced that they would be providing a new fee free 95% loan to value mortgage (5% deposit and 95% loan). The details of this new product offering are:
- A fee-free 95% LTV five-year fixed rate residential product (not available for buy-to-let)
- The product has a rate of 4.89%
- It can be used for both purchases and remortgage applications
- Comes with free valuation
- No application or arrangement fees
- Minimum loan amount of £30,000 and a maximum loan amount of £500,000
- Unlike many mortgage lenders, every individual case will be assessed by a dedicated underwriting team and won’t be subject to any credit scoring
Why Launch a 95% Mortgage Product When the Base Rate Has Just Increased?
Many people have been waiting with baited breath to see how mortgage lenders would react to the news that the Bank of England would be raising the base rate to 4.50% with most expecting product withdrawals and rate increase. However, it seems that Hanley have gone against this completely and have opted for the very admirable approach of helping those struggling to get a mortgage the most.
Head of marketing and business at Hanley, David Lowndes had this to say:
“Positive strides are being made across the housing and mortgage markets in the wake of increased economic stability and we, as a lender, are experiencing a slight uplift in the number of first-time buyer enquiries from our intermediary partners which signifies an encouraging development. Adjustments are being made by an array of potential borrowers to a higher interest rate norm and we remain committed to servicing the needs of FTB’s when and where we can. As such, we have extended our 95% LTV range to include a competitive fee-free five-year fix which should help provide lower deposit borrowers with a little extra security and lessen upfront costs.”
Is a 95% Mortgage a Good Idea?
Of course, the mortgage you choose and the one that is available to you depends entirely on your own circumstances and what your mortgage advisor recommends is best for you. But if you are struggling to save a deposit, a higher LTV mortgage product could be the thing that helps you to get onto the mortgage market quicker. When looking at 90, 95 or even 100% mortgages you should always consider how much you want to pay, how long you are planning on staying in the property for, and also the risk of negative equity if you sell your property for less than you bought it for.
If you are potentially looking at 95% mortgage or other low deposit mortgage options, please feel free to give our team a call today to explore your options. We’re here to help.