Help to Buy popularity sees more 95% mortgages available

June 12, 2016 by Brendan O'Neill

Borrowers

Since the Help to Buy scheme was introduced nearly three years ago, the number of mortgages which require a 5% deposit is five times higher than it was when the scheme started.

According to a study carried out by Moneyfacts, 95% mortgages are more popular with first time buyers, especially borrowers in the south and London. The Help to Buy mortgage guarantee scheme was introduced in October 2013. At that time, there were 56 mortgage products which would lend 95% of a property’s value. The number now available has increased to 271, according to the research.

However, for borrowers in the south of England, it isn’t always possible to maximise the benefits of a 95% mortgage, as higher property values mean a larger deposit is required. While 84.5% is the average mortgage size in Yorkshire, this figure falls to 77% in London for first time buyers.

Moneyfacts finance expert, Charlotte Nelson, states that as there are now more 95% mortgages available, it may be possible to find a suitable deal without the Help to Buy scheme. As the scheme is due to end in the near future, Nelson advises buyers to look at deals which are outside Help to Buy, as there may be some competitive rates on offer.

As an example of the potential rates available, Nelson cites the best rate currently available at the time of reporting, as 3.79%, while the best available rate within the scheme is 4.48%. Before signing up to any incentive, advice should be sought from a CeMAP trained mortgage adviser.