First-time buyers face rising mortgage rates as lenders raise rates on high-value loans
- Some lenders increased their rates on high-value mortgages last week
- Those most affected will be first-time buyers, who typically borrow 90% of the value
Banks are raising mortgage rates for homebuyers who can only deposit 10% of the property’s value.
A range of lenders increased their rates on high-value mortgages last week, even though the Bank of England’s interest rate remained low at 0.1 percent.
Those most affected will be first-time buyers, who typically borrow 90% or more of their property’s value.
A range of lenders increased their rates on high-value mortgages last week
HSBC – one of the few large banks still accepting first-time buyers with smaller deposits – has raised rates on its fixed-rate loan operations by 90%.
The Skipton Building Society has raised the rates on its three standard residential contracts to 85% loan-to-value.
The TSB increased its rate from 2.54% to 2.79% for its two-year fixation at 80% and 85% of the loan-to-value and its five-year contract fell from 2.34% to 2.59 %.
The cooperative intermediation platform also increased the rate on its loan to value by 90%, the five-year fixed rate free of charge by 0.20 and other rates by 0.25%.
David Hollingworth of London & Country Mortgages said: “In historical terms these are still very low rates, but lenders have to cut and change because of the challenges they face.
Demand has come back strongly and because there are so few lenders at this end of the market, they have to manage their affairs with care.
“If one lender pulls out there is a domino effect on other lenders and that can snowball quickly, which is why we see lenders dip their toes in the water and then pull out. “