The deal offers an arrangement fee of £999 and after two years, the rate reverts to a lifetime tracker at base + 2.99 per cent, or 3.49% at Barclays Base Rate.
The deal includes £500 towards legal fees and income protection and is available on any new Bovis Home.
Andy Gray, head of mortgages for Barclays, said: “The deal also gives a measure of protection for customers, Barclays and Bovis Homes and is testament to our commitment to get lending at 90 per cent levels on the right track but in a way which is sustainable in the long term.”
Bovis Homes chief executive David Ritchie said: “In the current climate house builders can’t just be about bricks and mortar, and they can’t sit back while homebuyers battle to raise the funds for a new home.”
Bovis said a typical first time buyer purchasing a Bovis Home at £150,000 would need a mortgage of £135,000 and pay £697.02 a month with the deal saving them around £170 a month. This is £4,000 over the two year period, against the average rate of 5.98 per cent for a two year fixed rate mortgage at 90 per cent LTV.
Jonathan Burridge, mortgage adviser with mortgage network Maan said the pricing is strong and it’s good to see lenders getting involved in the 90% market.
“Woolwich has always been a strong affordable housing lender and seeing LTVs rising like this indicates lenders are recognising we’re at the bottom of the cycle,” said Burridge.
He added with new-builds, a 90% LTV is practically 100% exposure for a lender, so lending will probably be very selective, with a very tight scorecard and acceptances for the cream of the applicants.
“With a new-build, the value only falls if you actually sell and with most first-time buyers staying three to five years, Woolwich is obviously expecting the market to rise,” he added.
He concluded: “Bring back mortgage indemnity premiums. Let’s start doing 95% LTVs – people need homes and people want to buy homes, so bring it on.”