With the government’s Help to Buy: Mortgage Guarantee Scheme, or Help to Buy 2, no longer available for first-time buyers, some lenders have stepped in to ensure those with only a 5% deposit are still able to find a mortgage.
Despite concerns that lenders would shy away from offering 95% mortgages without the support of Help to Buy 2, a number have announced deals that suggest confidence has returned in the low-deposit market. During one week in January, Halifax, Nationwide, Aldermore Bank, Yorkshire and Buckinghamshire Building Societies all announced that they were now offering 95% mortgages. This will give fresh hope to borrowers with small deposits.
There is now a good number of mortgage deals out there for borrowers with a 5% deposit. In fact, research from Moneyfacts has revealed that there were 242 available at one point in January, compared with only 49 back in 2012. This shows that there is clearly a stronger appetite for lenders to offer 95% mortgages in the current climate, and highlights Help to Buy 2’s necessity in the market during that interim period.
Not only are there deals out there to help those with small deposits, the Help to Buy: Equity Loan Scheme is also scheduled to be available until 2021.