Mortgage choice grows for fifth consecutive month
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Confidence appears to be returning to the mortgage market, with data showing that product choice has expanded for the fifth month in a row2.
Over the past two months, 639 new products have become available on the market, bringing the current total to 3,532 deals. This is the highest number of products on offer since March 2020, when 5,222 mortgage deals were available.
95% LTV mortgages lagging behind
Mortgage availability has improved across all loan-to-value (LTV) ratios – with the exception of 95% LTV mortgages, which have seen their numbers drop. The economic climate has rendered most lenders more cautious about offering high LTV mortgages to borrowers they perceive to be at higher risk of defaulting or slipping into negative equity. First-time buyers particularly suffered from the withdrawal of these deals – which is why the Chancellor’s announcement of a government guarantee on 95% LTV mortgages likely came as welcome news to those who have watched their dreams of homeownership ebb away.
Guarantee reassures lenders
The new scheme, which launched in April, will guarantee the portion of the mortgage that is over 80% LTV (i.e., the remaining 15%). This basically means that the government will compensate the lender for this portion of the net losses suffered in the event of repossession.
Find the best mortgage for you
A number of major high-street lenders have launched 95% deals, which could bring your property dreams within reach. We can help find the most suitable mortgage for your circumstances.
2 Moneyfacts, 2021