As the housing market comes back to life lenders are starting to reintroduce their 10% deposit mortgage rates.
Accord Mortgages, the broker lending arm of the Yorkshire Building Society, has returned to the 10% deposit market for property purchases and remortgages. The society has also started offering New Build products to borrowers with 15% deposits.
Clydesdale Bank and Virgin Money for Intermediaries are also set to return to the 10% deposit market following Government announcements last week. The banks are withdrawing the temporary limits on loan sizes and property values they had in place over recent weeks. They will also use a mixture of physical and remote valuations to inspect properties.
Aaron Strutt, product director at Trinity Financial, says: "The lenders have already started providing 15% deposit mortgages and some of them have increased their maximum loan sizes to offer £1 million+ rates again.
"Banks and building societies had to pull out of the low deposit market pretty quickly when we went into lockdown, but we are starting to see higher loan-to-value products coming back."
Call Trinity Financial on 020 7016 0790 to secure a 10% deposit mortgage or submit an enquiry
If you are looking for a larger mortgage loan Trinity's brokers have access to private banks offering high loan-to-value rates.
One private bank is offering 10% deposit mortgages potentially on part interest-only and part capital repayment.
While the bank will still consider taking bonus income into consideration to work out the maximum loan size, it wants to understand how COVID-19 will impact the income they expect to receive moving forward. The bank typically takes a three-year bonus average but there is a 25% "haircut" placed on higher loan-to-values products at the moment.
Deferred income, Vesting stock, Restricted stock units, Trust income, Carry income and Investment income can be considered for affordability purposes although the bank will use the year's low value and apply a haircut depending upon the sector. It will also assess the nature of the income source.
Foreign income is taken into account although a volatility haircut is applied dependant on currency and for high-net-worth clients, the bank can consider using liquid assets to meet affordability.
HSBC for Intermediaries is offering one of the most competitively priced 10% deposit rates for mortgages up to £400,000.
The rate is priced at 1.79% until 30-Sep-2022 followed by HSBC's Standard Variable Rate, currently 3.54%, for the remaining term of the mortgage. The overall cost for comparison is 3.4% APRC.
There is a £999 arrangement fee and early repayment charges apply until 30-Sep-2022.
Lenders are still offering self-employed borrowers a mortgage if they have a low deposit, but applicants are being asked to provide additional bank statements and more information in general.
The banks and building societies want to understand how businesses are coping with the coronavirus crisis and if they have suffered financially.
Over the coming months, the mortgage lenders that assess applications on a case by case basis with manual underwriting are likely to help the self-employed to purchase properties or remortgage if they have suffered. Better lenders will take the time to understand what has happened to their applicant's income and their long term plans.