Lloyds cut mortgage rate, but the fall in high LTV mortgages mean bigger deposits
The headline in today's Daily Mail, read "Lloyds cut mortgage rates"*.
When you read between the lines, it's actually a saving of around £35.00 pm on a £150K mortgage.
So what does this mean for first time buyers?
Not a lot, if your trying to get onto the bottom rung of the property ladder. According to their website, their best 2 year fixed rate mortgage deal is 60% loan to valuation. So to buy a £250K property, your first time buyer would need to put down £100K (no small change for anyone). Using their mortgage calculators, we've calculated that a first time buyer, earning around £30K pa, with no debts could borrow as much as £150K. On a repayment mortgage (3.29% fixed till 2011) over 25 years, your first time buyer would still need to fork out £734.15 per month (almost half their salary).
According to Shelter "It is almost 100% harder to buy a first home than it was 10 years ago"
Young people wanting to get on the property ladder are being asked for bigger deposits as the number of mortgage products get pulled from the market. Many first time buyers simply don't have the cash and are borrowing from family or staying at home with mum & dad instead of renting to try and save enough cash for a deposit.
Yet Lloyds TSB seem to be bucking the trend, as Yorkshire Building Society withdrew it's best 5 year fixed rate mortgage deal , warning that "it's cheapest offers would soon be pulled"*
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*Source: Daily Mail Newspaper Saturday, May 9, 2009
When you read between the lines, it's actually a saving of around £35.00 pm on a £150K mortgage.
So what does this mean for first time buyers?
Not a lot, if your trying to get onto the bottom rung of the property ladder. According to their website, their best 2 year fixed rate mortgage deal is 60% loan to valuation. So to buy a £250K property, your first time buyer would need to put down £100K (no small change for anyone). Using their mortgage calculators, we've calculated that a first time buyer, earning around £30K pa, with no debts could borrow as much as £150K. On a repayment mortgage (3.29% fixed till 2011) over 25 years, your first time buyer would still need to fork out £734.15 per month (almost half their salary).
According to Shelter "It is almost 100% harder to buy a first home than it was 10 years ago"
Young people wanting to get on the property ladder are being asked for bigger deposits as the number of mortgage products get pulled from the market. Many first time buyers simply don't have the cash and are borrowing from family or staying at home with mum & dad instead of renting to try and save enough cash for a deposit.
Yet Lloyds TSB seem to be bucking the trend, as Yorkshire Building Society withdrew it's best 5 year fixed rate mortgage deal , warning that "it's cheapest offers would soon be pulled"*
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*Source: Daily Mail Newspaper Saturday, May 9, 2009
- posted by The Editor
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As uk web marketing consultants working with estate agents and mortgage brokers, we are aware of some non traditional, or "exotic" mortgages, but borrowers should make sure they understand the implications of these loans.
Shared home ownership is the smart way to get on the property ladder!
There are signs the mortgage market is stabilising
The number of mortgages approved increased to the second highest figure in more than a year, as buyers return to the market.
It might surprise your readers to know that 27,685 mortgages were approved in April.
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