First-time buyers have more choice of mortgage deals after several banks and building societies this week launched 90% home loans.
During much of last year, 90% loan-to-value (LTV) deals requiring a 10% deposit were thin on the ground, but in recent weeks more lenders have stepped back into this market.
On Tuesday, a three-year fixed-rate 90% deal priced at 3.4% and with a £199 upfront fee was launched by Nottingham building society. It also rolled out a two-year fix at 85% LTV with a rate of 2.6% that has no fees. That same day, Ipswich building society launched a 90% LTV five-year fix at 3.45% with an application fee of £199 and completion fee of £800.
HSBC has trimmed rates on some of its 90% deals: one of its two-year fixes has been cut by 0.15% to 3.24%, while a five-year fix is down by 0.1% to 3.44% (both of these carry a £999 fee).
HSBC has also made changes to its rules on “variable pay”, enabling income from commission and overtime, in addition to quarterly, half-yearly or annual bonus payments, to be used to support affordability. The most recent payment must have been received in 2021.
On Thursday, Metro Bank overhauled its higher LTV mortgages. At 90% LTV, it has introduced new two- and three-year fixes priced from 3.19%. Its maximum loan size has been increased to £675,000 from £540,000.
Eleanor Williams at financial data provider Moneyfacts.co.uk says: “Options for those with a 10% deposit have improved greatly over recent months … This means there is far greater choice for would-be buyers in this area of the market.”