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Aldermore launches 95% LTV deal with Hitachi Capital

Aldermore is launching a mortgage scheme for those with a 5% deposit in conjunction with Hitachi Capital.

The deal combines a two-year fixed rate mortgage at 80% LTV from Aldermore with a 15% LTV unsecured loan provided by Hitachi Capital.

The two-year fix has a rate of 5.48% and has a £999 completion fee and a maximum loan size of £250,000.

The unsecured loan has a fixed rate of 5.90% for 12 years, has a maximum size of £50,000 and permits overpayments at any time.

The scheme is initially being marketed via Barratt Homes but will be rolled out to other house builders in due course.

Charles Haresnape, managing director of residential mortgages at Aldermore, says: “The single biggest issue holding back perfectly creditworthy house buyers is their inability to raise a sufficiently large deposit.

“Aldermore’s recently launched Family Guarantee Mortgage provides an option for borrowers seeking a 100% LTV loan and this scheme gives those who can raise a 5% cash deposit yet another route to home ownership.

“We are providing would-be homeowners with choices, in a market where the options for those with less than a 25% deposit are few and far between.”

Gerald Grimes, managing director at Hitachi Capital, says: “Would-be home buyers have become disheartened with the current housing market because of the large deposits demanded by a lot of lenders.

“Last year we teamed up with Barratt Homes to offer parents the opportunity to help their children onto the ladder; this year we are opening up this innovative product to the buyers directly.

“Initially this will be with Barratt Homes but we will be rolling it out through other house builders, such as Linden Homes, part of Galliford Try plc and Keepmoat Homes.”

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  • Michael White 20th September 2011 at 4:53 pm

    If you like Barratt it’s OK. I find it unlikely that the builder is not providing some form of guarantee? However, what the heck…as long as the borrower effectively benefits from the arrangement then all is well.

    For the beggar rather then the chooser 5.48% for 2 years is OK’ish….certainly very good for Charlie’s profit margin! Now over to the surveyors who will need to do a particularly good job at valuing the security.

    ….It’s always good to dust off the mortgage deals of yester-year. Looking forward to the next original idea to get the market moving….

  • Luke Atkinson 20th September 2011 at 1:36 pm

    Well done Aldermore, now this is a good offering.

  • Spongebob 20th September 2011 at 12:40 pm

    Doesn’t beat saving though!

  • Toby Wells (IFA) 19th September 2011 at 2:55 pm

    This is BRILLIANT.

    The loan from Hitachi Capital is (A) UNSECURED and (B) the Interest Rate is FIXED for 12 WHOLE YEARS at just 5.9%. There are no loans up to £50,000 on an UNSECURED basis ANYWHERE at 5.9%. WOW!

    The buyer can be certain that rises in interest rates (and this will happen in the future) will not impact them!

    Then after the 2 year deal from Aldermore has ended they can easily remortgage elsewhere on to a low interest rate because they only borrowed 80% on the house purchase. The loan from Hitachi Capital is just an unsecured credit committment like a credit card or car loan that just needs to be taken into account.

    This will massively help our clients and mean they are not trapped in high LTV priced products meaning they can easily remortgage.

    You can also repay the Hitachi loan off early at any time without any penalty which is just great news!

    A BIG THANK YOU TO HITACHI for bringing this to market.

    The cheapest 95% is Skipton at 5.99% and has just an 11% acceptance rate so this is a VERY WELCOME PRODUCT!

  • Tony Wells 19th September 2011 at 2:54 pm

    This is BRILLIANT.

    The loan from Hitachi Capital is (A) UNSECURED and (B) the Interest Rate is FIXED for 12 WHOLE YEARS at just 5.9%. There are no loans up to £50,000 on an UNSECURED basis ANYWHERE at 5.9%. WOW!

    The buyer can be certain that rises in interest rates (and this will happen in the future) will not impact them!

    Then after the 2 year deal from Aldermore has ended they can easily remortgage elsewhere on to a low interest rate because they only borrowed 80% on the house purchase. The loan from Hitachi Capital is just an unsecured credit committment like a credit card or car loan that just needs to be taken into account.

    This will massively help our clients and mean they are not trapped in high LTV priced products meaning they can easily remortgage.

    You can also repay the Hitachi loan off early at any time without any penalty which is just great news!

    A BIG THANK YOU TO HITACHI for bringing this to market.

    The cheapest 95% is Skipton at 5.99% and has just an 11% acceptance rate so this is a VERY WELCOME PRODUCT!

  • simonb 19th September 2011 at 1:44 pm

    well, you can’t say they are not trying !!!

    not sure if this is the most cost effective deal ‘out there’ but they should at least be applauded for trying something different

  • Ben 19th September 2011 at 1:16 pm

    So will it be available to intermediaries or just applicants buying homes direct from Barratt? Would be risky move for lender who says they are “dedicated exclusively to the intermediary mortgage market”