Save to Buy Vs Help to Buy

Salander

Hello all,

the big benefit of Nationwide's Save to Buy account is the prospect of a 5% mortgage at the end of it. Does then the new Help to Buy scheme mean its end?

I guess it will mean that loans are less risky and so the rates will go down across the board?

Why would nationwide want to lend via the Save to Buy scheme when it could lend at 5% with a government guarantee backing it up as well- this must be a better deal for them (and the customer eventually?)

Thoughts...

kingstreet

NO STB and the other 16 lenders offering 95% products will continue to do so. You'll have the HTB - MG products to choose from too.

Compare the rates, fees etc and see which suits you best.

The lender (and you, indirectly) will pay for the Government guarantee, so they will not necessarily replace existing 95% facilities.

witchy1066

some of the smaller lenders who do not sign up for these schemes will still have some competitive localised discounts
as they do now

my personal observation only, I am not an expert in mortgages or anything else for that matter

kingstreet

HTB guide - the differences;-

http://yournews-legalandgeneral.com/pv_obj_cache/pv_obj_id_BB320F8298FC1120B8826B44DE0AD12E294C0800/filename/Help%20to%20Buy%20Definition%20Budget%202013.pdf

Thrugelmir

Salander wrote: »

Why would nationwide want to lend via the Save to Buy scheme when it could lend at 5% with a government guarantee backing it up as well- this must be a better deal for them (and the customer eventually?)

Thoughts...

You are overlooking an important fact. The NW still needs to raise the funding in order to advance mortgages. So Save to Buy is dual purpose. It provides NW with retail deposits from savers to lend. Unlike the major banks, Building Societies are far more limited in their ability to raise funding other than from retail savers. More so since the great financial crash.