February Mortgage News Update

Posted by Mortgage Squared on 24th February 2021 -

Help to Buy deadline extended amid Covid delays

A deadline to buy a home under the current Help to Buy scheme in England has been extended to the end of May. Covid-related delays meant more than 16,000 sales were at risk, with buyers facing large bills were purchases to fall through at the last minute. Construction of newly-built homes, which qualify for the scheme, have been put back by as much as eight months.  Buyers faced losing money if their homes were not built before the deadline with fees etc.

Stamp Duty Holiday Extension 

With the budget due soon there are growing rumours the Stamp Duty holiday will be extended past his deadline date of 31^stMarch 2021.  The housing market improvement has meant a delay in some mortgage applications so the property industry is pleading with the Government to extend the deadline to allow for these applications to go through. There could also be a taper process instead to allow for these existing applications to go through.

Mortgages: UK retail banks launch new high LTV offers – 90, 85 and 80% deals available

MORTGAGE deals for high loan to value (LTV) offers have been launched and updated across a number of well-known financial firms this week. In recent days, HSBC, the Nottingham Building Society and Metro Bank all laid out new products for home buying customers. Today, Metro Bank revealed an “overhaul” of its higher LTV residential products. The specialist lender has introduced two and three year fixed rate mortgages at 90 percent LTV, in addition to their existing five year products.

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Time taken to save a first home deposit rises by up to three years

The time it’s taking for first-time buyers to save for their first home has grown by three years in some parts of the national property market. Yes Homebuyers looked at the cost of the average deposit at 15% of the current average first-time buyer house price. It then looked at how long it was taking to save for this deposit based on tucking away 20% of a first-time buyer’s net monthly income and how this timeline has changed since 2012.

With the current first-time buyer house price sitting at £209,163 across Britain, a 15% deposit requires a savings pot of £31,374. With the average first-time buyer taking home a net monthly income of £1,970, saving at a rate of 20% a month would see them put away just £394. As a result, it’s currently taking the average first-time buyer in Britain 6.6 years to save for a mortgage deposit. This is over a year (1.1) longer than it was taking them to save the same size mortgage deposit back in 2012. Full article here:

Virgin Extends Cashback Deal with Low Rates

The financial giant Virgin Money has recently renewed 2 of it’s cashback mortgage deals with new low rates. The lender has also cut rates on other mortgage products it provides. From 23^rd February it will offer a rate of 1.74% for its 75% LTV five year mortgage product. It will also offer rates of 2.69% for it’s 85% LTV two year mortgage product. Bothe these come with a £995 fee but offer a cashback of £1,000.

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TSB Cuts Buy to Let Rates For Businesses

TSB has lowered the interest rates on some of it’s Buy to Let purchase and remortgage products.  The 2 year product with 75% loan to value criteria now has a rate of 1.69% for the £1,9995 fee version and the £995 fee version has a rate of 1.89%.

Dudley Building Society launches new mortgage for people with disabilities

A new mortgage product specially for people with disabilities who want to buy their own home has been launched by Dudley Building Society.  In partnership with a Government backed initiative called HOLD (Home Ownership For People With Long Term Disabilities). It works like a shared ownership product and applicants can buy a share of their home, anything from 25% to 75% and pay rent on the remaining share.

First-time buyers now need a deposit of at least 20% to get on the ladder

The average first time buyer now needs a deposit of 20% to get on the property ladder, figures suggest. As affordability continues to outstrip earnings, even when mortgages are extended past the normal 25 year period. More and more people are going for mortgages longer then 25 years, some up to 35 years which could greatly increase the amount of interest they pay overall, sometimes up to 40% more.

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First time buyers market starts strong in 2021

The number of 10% deposit mortgage deals has increased to 117 in the first few weeks of 2021.  This means first time buyers have more chance of getting on the property ladder.  This comes after 2020  was a bad year for first time buyers with 10% deposit mortgages being taken from many Banks and Building Societies products offering.  Over 15 lenders have now added a 10% deposit mortgage deal to their mortgage products. This is still down from the start of last year when there was over 700 different 10% mortgage products available.

Lloyds Bank and Santander lead the way with low interest rates in February 2021

These 2 finance giants at present offer a low interest rate of 1.09% fixed over 2 years. The product fee is £1,499. For Lloyds this on a LTV mortgage of 60% with a minimum loan of £250,000.  With Lloyds you also get free valuation, no legal fees and £200 cashback too.  Santander  offer this rate on a minimum loan of £350,000 with cashback of £250 and free valuation.