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Mortgage tech tools to boost first-time buyer savings unveiled

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  • 13/01/2021
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Mortgage tech tools to boost first-time buyer savings unveiled
First-time buyers and homemovers saving for a deposit or searching for the best deal can take advantage of two new technology tools to hit the mortgage market.

 

Barclays has added a first home savings tool to its app to help borrowers hit their deposit goals.

Users can create a ‘first home’ savings goal in their Barclays app and set up a regular transfer to an existing savings account.

They will receive regular updates on their progress, advice on setting the goal through the First Home Savings Calculator and access to mentors and mortgage advisers who can give them practical pointers on saving.

The second tool is the result of partnership between Mojo Mortgages and fintech app Snoop, a savings and budgeting tool that uses open banking technology.

The app can spot if users are overpaying on their bills and help them to get better deals on energy and mobile tariffs, for example. It can also point users towards better deals on their food shopping to help them build up their savings pot.

And in partnership with Mojo, the app will show users the best time to remortgage and provide first-time buyers with the best mortgage deals in their news feed.

Richard Hayes, chief executive and co-founder of Mojo Mortgages, said: “There’s no doubt times are tough right now with some lenders limiting high loan to value mortgages, but this partnership helps to fight that.

“It not only makes you more aware of your financial situation, but crucially shows you the options that are still available to you – options many people may be totally unaware of. Plus, you get access to free, expert advice at the click of a few buttons.”

 

‘Reversal of fortunes’

First-time buyers were shown little love by the banks in 2020, as equity rich borrowers benefitted from the lion’s share of mortgage deals and low rates.

At the start of the pandemic lenders retreated from high loan to value lending firstly because of lockdown restrictions and the challenges posed by working from home.

The next blow to high LTV lending came when the housing market reopened in May and the government decided to increase the nil-rate stamp duty threshold up to £500,000 in England.

Lenders were overrun with applications and forced to reduce their ranges to cope with capacity. This saw deals for borrowers with a deposit of 10 per cent or less almost disappear.

Analysis by Reallymoving found the first-time buyer market contracted by 12 per cent between July and December, compared to the previous year.

However, towards the end of 2020 banks and building societies began to return to 90 per cent lending.

Earlier this week, Moneyfacts reported the number of products available at 90 per cent LTV had reached a six-month high.

Reallymoving chief executive Rob Houghton believes first-time buyers could experience a ‘reversal of fortunes’ in 2021.

He said there were reasons for new buyers to be optimistic with lenders returning to the market, a likely slow down in competition for homes when the stamp duty holiday ends, and house prices potentially re-adjusting downwards.

 

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