First Time Buyers facing higher mortgage costs
The cost of finance for customers with smaller deposits has hit a new high, according to a new report.
The research from Genworth shows that the cost of mortgages between 75 and 95 per cent loan-to-value (LTV) is at a nine year high as banks charge first time buyers and those with a small equity stake a record £2,800 a year penalty to secure a home.
Someone with a deposit of 5 per cent is typically being charged an annual rate of 5.27 per cent, while lower risk borrowers with a healthy 35% stake are only paying around 2.46 per cent for a two year mortgage.
The report revealed that since last year almost 100 extra mortgages are now available to those with a 5% deposit, including more than 60 via the Help-to-Buy guarantee scheme.
A spokesman for Genworth said: “Aspiring homebuyers would suffer a huge blow without the options currently available through Help to Buy. There is a long-term need to support high LTV mortgage lending but there are far better solutions than creating a long term burden on the state to do so.”
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