Mortgage bulletin for week commencing Monday 16 December

Posted 16 December 2013

With mortgage lending set to increase in the New Year as the housing market continues to strengthen, the first-time buyer market is one that most lenders are keen to offer new products.

Virgin Money has announced the launch of its new 90% and 95% loan-to-value (LTV) residential mortgages as part of the government's Help to Buy mortgage guarantee scheme, several weeks ahead of schedule. The products are available with immediate effect through all mortgage distribution channels, including Virgin Money's stores and intermediary partners.

Two-year fixed-rates mortgages are available at 5.29% at 95% LTV and 4.29% at 90% LTV. Three-year fixed-rate deals are available at 5.39% at 95% LTV and 4.69% at 90% LTV. For customers who wish to fix their mortgage rate for a longer period, Virgin Money is offering five-year fixed rate of 5.49% at 95% LTV and 4.89% at 90% LTV.

None of the mortgages from the new range have a product fee and purchase customers are eligible to claim £300 cashback as a contribution towards legal fees, valuation fees or the general cost of moving home.

Anthony Mooney, director of financial services at Virgin Money, said: "We want to continue to build our support for people's homeownership ambitions. Joining the Help to Buy mortgage guarantee scheme, several weeks ahead of our original plans, further strengthens our commitment to consumers in this under-served part of the market. It is encouraging to see that the scheme has got off to a strong start, and we are pleased to be widening the choice of products available to those looking to get on to or move up the housing ladder."

HSBC is offering to beat a range of High Street providers with its low-deposit range for first-time residential buyers with deposits of as little as 10%. The bank promises to match the published rates of a range of its competitors on mortgages with booking fees up to £999 on loans up to 90%.

The two-year fixed-rate High Street Special at 90% LTV is 3.59% while the five-year fixed-rate High Street Special is currently 4.39% at 90% LTV. Both products have fees of £1,400, reduced to £999 for HSBC current account holders. Lifetime tracker products offer interest rates of 4.19% with fees of £999, reduced to £499 for current account holders.

Beverly Building Society is currently offering a two-year fixed-rate mortgage at 90% LTV at 3.49% on mortgages up to £150,000 with completion fees of £495, while the Post Office two-year fixed-rate mortgage at 3.59% with an arrangement fee of £1,495. Both lenders may require either a Valuation Survey or Homebuyer survey.

A number of lenders are offering 95% LTV products. The Yorkshire Bank Flexi Fixed mortgage offers a fixed rate for three years at 4.99% on mortgages up to 95% LTV, with no fees and £250 cashback, while the NatWest five-year fixed rate at 95% LTV is 5.49% with no fees, or 4.99% fixed for two years, again with no product fee.

Nationwide Building Society 95% LTV Flex deals for first-time buyers cost 5.59% fixed for three years with fees of £499 or 5.89% with no fees, while five-year fixed-rate rates are 6.29% with £499 fees or 6.49% without fees.

One of the best fixed-rate deals for first-ime buyers at 95% LTV is the Cumberland Building Society, at 3.29% fixed for five years, reverting to the society's variable rate after the fixed period, currently 4.49%. The product is available to existing customers on mortgages up to £250,000 with fees of £299.

Clydesdale Bank is offering a First Time Buyer rate of 4.99% for its 95% LTV, fixed for three years, with no fees and £250 cashback on completion. This special rate is available to existing Clydesdale account holders and those who do not have an account with the bank.

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