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Major lenders commit to 95% mortgages after end of Help to Buy

Posted 13 January 2017 by Keith Osborne

The death of the Help to Buy Mortgage Guarantee scheme doesn't mean homebuyers are short of finance that only requires a 5% deposit on a new home...

The end of 2016 saw the closure of the government's flagship Help to Buy scheme. The initiative, designed to help property buyers secure low-deposit mortgages, helped 95,000 people to get onto the property ladder over more than three years.

Despite the closure of the scheme on 31 December, many lenders have reaffirmed their commitment to high loan-to-value mortgages.

Halifax launches new range of 95% mortgage deals

Several of the UK's largest lenders have confirmed that they will continue 95% mortgage lending in spite of the closure of the government's Help to Buy mortgage guarantee scheme.

Halifax, one of the UK's largest lenders, has launched a new range of products to replace the loans previously available under Help to Buy. These include a number of 95% deals, including a range of first-time buyer fixed rates.

The Halifax Intermediaries deals start at 3.34%, fixed for two years with a £999 fee. The same deal is available at 3.74% with no fee. The five-year fixed version has a 4.29% rate with a £999 fee or a 4.49% rate and no fee.

As well as a range of first-time buyer products, the lender has also introduced a 95% LTV homeowner loan. This begins at 3.39% for a two-year fix with a £999 fee, and 3.79% for the fee-free option.

Halifax Intermediaries head Ian Wilson says: “By introducing this new range of products at the start of the new year, we can help brokers to confidently continue supporting their clients with higher LTV borrowing needs.”

Yorkshire also launches 95% mortgage range

Mortgage Strategy reports that there are 30 lenders in the UK still offering 95% mortgage products after the end of Help to Buy. As well as the Halifax, Yorkshire Building Society has also announced that it will keep lending at 95%. The society’s lending at 95% rose by 50% in 2016 compared to 2015, despite not being a part of the official government scheme.

David Robinson, national intermediary sales manager for Accord Mortgages, part of the Yorkshire Building Society group, says: “Feedback from brokers suggests that demand for 95% home loans is still high, which is reflected in the level of business we have seen at this LTV.

“Some may see the withdrawal of the Help to Buy mortgage guarantee scheme as a blow to first-time buyers, however there are still plenty of options available to those with smaller deposits. We will continue to lend at this level and play our part in ensuring there is still plenty of choice for first-time-buyers and borrowers with small deposits."

 

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