Borrowers with a 5% deposit are paying a higher premium to access low deposit mortgages.
According to research from the finance company Genworth, the average price gap between 75% ltv and 95% ltv mortgages grew to 2.81% in September, up from 2.69% in recent months. The average 95% ltv mortgage rate is 5.27%, more than double the 75% ltv average of 2.46%.
Lenders typically increase their mortgage rates in 5% increments. So, if borrows are able to raise a larger deposit, it may be possible to secure a much better deal.
Genworth vice president for mortgage insurance Europe Simon Crone says: “Simply needing a high-LTV mortgage is no real indication of someone’s credit quality, but these findings show homebuyers with a 5% deposit are being made to pay a rising premium that rivals the cost of unsecured borrowing.”
If you would like help to secure a low deposit mortgage, call Trinity on 020 7016 0790.