Challenger bank Aldermore is the latest lender to announce its Help to Buy mortgage guarantee rates, but they fall short of the best rates available on the scheme.
Its rates, which rise to 5.28% at 95% LTV, are beaten by a string of 95% LTV deals offered by local and regional building societies outside the scheme.
Following Virgin's recent similarly disappointing rates last week, this will frustrate critics of Help to Buy who have previously claimed that high rates are making a mockery of the scheme.
Instead of increased competition driving down rates, as predicted, the latest deals have pushed them higher.
Aldermore's two-year fixed-rate mortgage under the scheme charges 5.28% up to 95% LTV, with a £999 fee.
This is only a fraction below Virgin's two-year fix, which charges 5.29%, but with no fee.
Aldermore and Virgin's rates are both notably higher than the cheapest deal on the scheme, a two-year fix from HSBC charging 4.79% with a £99 booking fee. HSBC also offers five-year fix at 4.99%, with a £99 booking fee.
RBS/NatWest has a two-year fix charging 4.99% at 95% LTV, with no product fee.
But these rates are bettered by cheaper deals outside the scheme, funded through private insurance rather than a government guarantee.
Monmouthshire offers variable rates from just 3.75% to 95% LTV, while Cambridge offers a first-time buyer deal charging 3.99% in the first year.
Hanley Economic and the Yorkshire Building Society also offer competitive 95% LTV deals.
Charles Haresnape, managing director of residential mortgages, said Aldermore is making its Help to Buy mortgage guarantee available on remortgages and not just new purchases.
“We are committed to lending to homeowners in the UK, especially those with small deposits, to get on the housing ladder and those who are unable to access mortgages from traditional high street lenders, despite being creditworthy."
Aldermore is also offering a fixed rate up to 90% LTV charging 4.98%, again, with a £999 fee.
Comments