Mortgage rates at higher LTVs have improved marginally, but product choice continues to remains “patchy” according to new market research.
The differential between the mortgage rates charged at 75 per cent LTV and 95 per cent LTV narrowed slightly towards the year end – but borrowers are still paying around two-thirds more in mortgage costs each year at these higher LTV bands.
The AmTrust Mortgage LTV Tracker said many lenders have increased mortgage rates at 75 per cent LTV following November’s increase in Base Rate. But lenders had not typically increased the rates of their 95 per cent LTV products.
However AmTrust said that this quarterly research showed that product availability remained limited in some parts of the market, with notable fluctuations in the number of products available, depending on the type of loan and house purchase price.
AmTrust found there was more choice for those looking to buy property priced around the £163,000 mark – the average purchase price paid by a first-time buyer.
On loans of this size there were 164 mortgage products available at 95 per cent LTV, in the fourth quarter of this year. This compares to just six products available in the previous quarter. This includes both fixed rate and variable deals.
However for those taking out larger loans there has been a significant constriction in product choice. Those looking for a 95 per cent loan on the average property price – of £226,821 – have just seven products to choose from. This compares to 150 products that were available in the previous quarter.
AmTrust Mortgage & Credit business development director Pad Bamford says: “The end of 2017 brought better news for first-time buyers.” This included abolishing stamp duty (on properties up to £300,000), plus further support for affordable housing.
He says the latest findings from the quarterly AmTrust Mortgage Tacker show improvements for those first-timers with smaller deposits, as average interest rates fell slightly, while the average first-time buyer house price stayed level.