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Barclays targets first-time buyers as number of 95% LTV mortgages hits post-crisis high

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  • 12/03/2018
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Barclays targets first-time buyers as number of 95% LTV mortgages hits post-crisis high
Barclays has launched fresh deals for first-time buyers, as the number of mortgages at 95% loan-to-value (LTV) has reached the highest level since the financial crisis, analysis showed.

 

Barclays is the latest lender to target small deposit borrowers, including a rate of 3.94% and 2.29% for buyers with a deposit of 5% and 10% respectively, fixed for two years, while buyers at 85% LTV can get a rate of 1.98.

All these deals are product free and include with £500 cashback.

Its move came after Sainsbury’s and Yorkshire Bank recently launched new rates for borrowers at 95% LTV.

 

More than 300 deals

The number of deals for buyers with a deposit of only 5% has now topped 300 for the first time in almost 10 years, according to Moneyfacts.co.uk.

Charlotte Nelson from Moneyfacts, said: “The numbers for this month were improved by eight lenders re-entering the market.

“Providers know that many borrowers on their mortgage books, who are coming to the end of their mortgage, may want to take advantage of the low rates on offer elsewhere.

“So, the introduction of new deals at 95% will give the providers’ mortgage book a new zest for life.”

The average rate on 95% LTV has also fallen over the past six months from 4.16% to 4.02% – despite the Bank of England base rate rise in November.

The typical rate was at 6.39% in April 2008, Moneyfacts data showed.

 

Creep back up

However, rates are likely to creep back up in the coming weeks, according to Nelson.

She said: “Swap rates have been rising for some time, and now three-month London Inter-bank Ordinary Rate (LIBOR) has started to rise along with the expectancy that a base rate rise in the near future is probable.

“In fact, fixed rates in other areas have started to rise to compensate for the higher swap rates.

“With a similar scenario prior to November’s rate rise, it is now not a matter of if rates on 95% LTV products will rise, but when.”

Hannah Bernard, managing director of Barclays Mortgages added: “Spring is traditionally a period of increased house buying activity and providing competitive rates will enable more first time buyers and those with smaller deposits to get on, and move up, the property ladder, as well as helping those looking to remortgage to achieve further savings.”

The lender has also today launched a seven-year fixed rate at 2.19% for buyers at 60% LTV, which comes with a £999 product fee.

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