95% mortgages now only on offer from a couple of lenders
March 6, 2009
According to a recent report the once traditional 95 percent mortgage is now only available from a couple of lenders on the market, with other lenders demanding far higher deposits from borrowers.
The 95 percent mortgage was once hugely popular and offered by the vast majority of lenders, but over the past year the mortgage industry has changed radically as a result of the global credit crunch, and those with just a small deposit are finding it increasingly difficult to get a mortgage.
The report claims that the only two lenders that are now offering 95 percent mortgages are Ipswich and Abbey, and the mform.co.uk reports further claims that only ten lenders are now offering 90 percent mortgages. This means that in most cases borrowers will be expected to pay in excess of 10 percent of the property value by way of a deposit, and many lenders are asking for 25 percent or even 40 percent of the property value as a deposit.
The research showed that the number of deals available to first time buyers is also dwindling, as the mortgage market continues to become more and more restricted. In fact, figures suggest that there were more deals available nine months ago for first time buyers with just a 5 percent deposit to put down than there are now for first time buyers with around 20 percent to put down.
One official stated: “With house prices down up to 16 per cent in 2008 and interest rates at historic lows the conditions are almost exactly right for first-time buyers to come back into the market. The only fly in the ointment is admittedly the rather large problem that lenders are just not lending. It is incredible to remember that in April last year there were still plenty of 95 per cent mortgages around. Now there are just a handful of 90 per cent loans and it is incredible that the Government-backed banks are not at the forefront of the market. They’ve been bailed out so now would be the time to lend.”
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