First time buyers ready to snap up 95% LTV mortgage offers

Two more heavy hitting lenders, The Clydesdale and the Yorkshire banks have opened their doors a little wider to first time buyers today by offering attractively priced mortgages for first timers with as little as 5% deposit.

Naturally the smaller the deposit the buyer has, the more expensive the cost, reflected in the interest rate, but for those with over than 10% deposit a rate of just 5.49% is achievable with the rate fixed for 3 years and a fee of just £599. Those aspiring home owners with just 5% deposit can also fix for 3 years but at a higher rate of 6.12%

Helen Adams Managing Director of first time buyer website FirstRungNow.com comments: “We know lenders are nervous about tackling this sector of the market head on so we are pleased to see more mortgages like these. It’s hard for first timers to save for a deposit so a mortgage for those with just 5% deposit is ideal for now – and the fixed rate for 3 years should give them confidence that their monthly mortgage outgoings won’t go up at all in that period.”

FirstRungNow.com has just completed an on-line poll amongst over 200 aspiring first time buyers revealing that 66% of them will save their costs and deposit before seeking advice from advisors or lenders such as Yorkshire and Clydesdale though 76% say they are more likely to approach a whole-of-the-market advisor than lenders direct. Further, and of some concern, a hefty 41% are very nervous of being rejected by the lender and the longer term consequences of that happening.

Adams continues: “At a time when more lenders are finally making it clear that they are now prepared to lend to first timers with smaller deposits, first timers should not be so worried about lender rejection as this is not as prevalent as they fear. We recommend aspiring first time home owners seek out a good mortgage advisor who can really find them the best mortgage for their situation – after all, the advisors have a good grip on what that moment’s best deals are – from across the whole of the mortgage market.”