First Time Buyer Mortgage Rates And Loan Percentages

Morth93

Hello,

I just had a conversation with my bank about getting a mortgage but they're only currently doing 60-80% loans. Due to the lockdown they're currently not doing the 90/95% loans for first time buyers. I want a mortgage in my name only and have £15,000. I was looking at a place on the market for £175,000 so need £160,000. I appreciate this puts it at 9% and not 10% but thought it would be enough to get me in the door. I have a secure job and a good credit score.

Are all banks currently doing this or if they are doing 90% loans, will the interest rates be much higher? I've used the 'Mortgage Best-Buy Tool' on here and it's at 2.75% over 30 years so would it be worth waiting until after the lockdown?

Any help is appreciated as my knowledge is very limited with this kind of thing. Sorry if there's already a thread for this, I couldn't find anything about it.

Thanks, Mike

SamJ35

Yes, at those LTVs your choices are either (1) borrowing at a higher interest rate (2+ or 3+ %), or (2) waiting it out. 
Get yourself a mortgage broker and see if they can do anything better for you. But may be a case of waiting, increasing deposit, and seeing where things are when the 90/95% LTV products come back to the market fully. 

Morth93

In the long run it'll probably be best to wait then. Thank you for the reply!

ec9wrr

Morth93 said:

In the long run it'll probably be best to wait then. Thank you for the reply!

Or get a mortgage broker to compare for you as stated by SamJ35 -
you could pay those high % rates for a couple of years whilst increasing your savings / making capital payments. Then remortgage at a better LTV. 

Morth93

Ok I'll phone around and see what sort of deal they can get me. Thank you ec9wrr.

getmore4less

There are some deals about but the bottom line is whats it costing you for accommodation now and what will it cost if you get a mortgage and have to pay for a place.
If living cheaper now and saving at a decent rate then maybe hold off a bit to improve the LTV.
if living costs now are more or not much different to buying then on repayment you start building up equity.
problem is starting at 95% LTV rates are high, equity building is slow so unless you can't save as well getting the LTV improved may be harder.
in a rising market this is less of a problem but we may see a stagnation if the economy stalls.