The two-year fixed rate mortgages have rates starting from 3.79% and are available up to 90% Loan to Value (LTV). [Full range can be seen in graph below]
Stephen Noakes, director of mortgages, at Lloyds TSB, said: “We are committed to making the housing market more accessible to first-time buyers. Shared equity and shared ownership schemes offer a secure and more affordable alternative to buying a home outright, and the schemes are an important part of the market for first-time buyers and homemovers.
“By adding these mortgages to our range we are hoping that we will be able to help more people realise their dream of home ownership.”
Ben Thompson, managing director of the Legal & General Mortgage Club, added: “This move by Lloyds TSB to help boost the number of first-time buyers able to get onto the property ladder is definitely a positive one.
“What the mortgage market really needs is increased competition, especially when it comes to products available to borrowers with smaller deposits. The fact that the new Lloyds mortgages will cater for this market, offering products on loans up to 90% LTV is definitely a step in the right direction. If we are to see a significant impact on the wider economy, however, we will need to see other high street banks and large institutions following in their footsteps and moving up the risk curve.”
Richard Stone, director of Sherwins, which specialises in mortgages for affordable housing schemes, said the key for the shared ownership market has been trying to get 95% funding for the share.
Stone said: “Historically that never used to be the problem, but currently there is only one generic product in the market and then there are a couple of exclusive arrangements that we put together ourselves.
“It’s very difficult for members of the public to wander into the lender and get a 95% mortgage for shared ownership. This could change in the future although the Financial Services Authority still has different capital adequacy requirements for shared ownership then they do for other areas. A lot of the smaller lenders who would otherwise be in this market don’t want to commit when they have to keep larger sums of capital back to lend at 95% LTV.”
Shared equity/ownership product range:
* Rates exclusive to Lloyds TSB current account customers, for non-current account customers rates are 0.20% higher
