The return of mortgages with 5% deposits!

LMJ10

MWT said

LMJ10 said:

K_S said:

@LMJ10 If it's anything like the last H2B mortgage guarantee scheme, it'll just be a 95% LTV product at the front-end.

Do you think you’d be able to put 10% down? Basically we are waiting for the 90% products to reappear.
wonder if you can put an extra 5% down to?

You will just go for a 90% LTV product in that case.

This new announcement isn't a scheme you use as a borrower, it is just something to encourage the lenders to offer 95% LTV products.

Yeah, but I wonder if this will increase the 90% products to, as for the lenders I’ll need to look at (adverse) they don’t have many on offer at the moment. 

Thrugelmir

LMJ10 said:

MWT said

LMJ10 said:

K_S said:

@LMJ10 If it's anything like the last H2B mortgage guarantee scheme, it'll just be a 95% LTV product at the front-end.

Do you think you’d be able to put 10% down? Basically we are waiting for the 90% products to reappear.
wonder if you can put an extra 5% down to?

You will just go for a 90% LTV product in that case.

This new announcement isn't a scheme you use as a borrower, it is just something to encourage the lenders to offer 95% LTV products.

Yeah, but I wonder if this will increase the 90% products to, as for the lenders I’ll need to look at (adverse) they don’t have many on offer at the moment. 

One scheme is unlikely to change the broader market at a time of economic turbulence.  Any scheme announced is bound to have rules attached and a cost to bare.

hippocrates1

LMJ10 said:

K_S said:

@LMJ10 If it's anything like the last H2B mortgage guarantee scheme, it'll just be a 95% LTV product at the front-end.

Do you think you’d be able to put 10% down? Basically we are waiting for the 90% products to reappear.
wonder if you can put an extra 5% down to?

90 LTV products are back

[Deleted User]

I cant see this relaxing the 90% market much in the short term.  Majority of 90% lenders have really high credit scoring requirements at the moment and I doubt it will ease just because they are doing 95%. You could argue the other way and say they will tighten the whole business if they are adding in increased risk in a different area. 

Getting_greyer

It's interesting as if someone has 10% deposit.  What would the rate difference be between a normal mortgage of 90% and one of 95% where the government guarantees say 20% of it.  Hypothetical of course. 

Thrugelmir

Getting_greyer said:

It's interesting as if someone has 10% deposit.  What would the rate difference be between a normal mortgage of 90% and one of 95% where the government guarantees say 20% of it.  Hypothetical of course. 

Guarantees are paid for in some form or another. Not free money. As there'll be defaults. 

K_S

Getting_greyer said:

It's interesting as if someone has 10% deposit.  What would the rate difference be between a normal mortgage of 90% and one of 95% where the government guarantees say 20% of it.  Hypothetical of course. 

@Getting_greyer Looking back at the early days of the H2B mortgage guarantee scheme in 2014, it looks like the 95% LTV mainstream no-fee 2yr rates were between 5-5.5%, 90% LTV around 1% lower and 85% LTV a further ~0.75% less. This is a very crude comparison of course.

iKarlCPFC

In terms of helping someone get a more expensive house. This doesn't change much?

If my max borrow amount is £280k and I have near enough that 10% already, waiting for 5% to be allowed would do nothing for me?

Unless the banks will then be able to offer more that you can borrow?

demontfort

As a FTB who bought at 38 with no use of these government freebies and who paid a big whack of stamp duty, I'm just curious to know from both first time buyers and government:
1) Why I should care less whether or not first time buyers struggle to save for a deposit and can afford to pay stamp duty?
2) Why myself and other taxpayers (homeowners or renters) should subsidise people buying a house though the stamp duty holiday and help to buy stupidity?
3) Why the government is putting the taxpayer om the hook by guaranteeing high risk borrowing just as we're in the middle of global recession?

K_S

iKarlCPFC said:

In terms of helping someone get a more expensive house. This doesn't change much?

If my max borrow amount is £280k and I have near enough that 10% already, waiting for 5% to be allowed would do nothing for me?

Unless the banks will then be able to offer more that you can borrow?

@iKarlCPFC That's right, it wouldn't help you borrow more on the same income. In fact, you can probably expect a slightly lower LTI limit compared to lower LTVs, just as some lenders have different LTIs above and below the 85% LTV mark currently.