Yorkshire Building Society Group has made a big splash in the 95% LTV mortgage market by launching 36 different deals, all of them outside the Help to Buy scheme.
Rates start at just 4.59%, that's 0.3% cheaper than the lowest rate currently available under Help to Buy, a two-year fixed rate from RBS/NatWest charging 4.99%.
The range of two-year and five-year fixed-rate mortgages are available through Yorkshire, Barnsley, Chelsea and Norwich & Peterborough (N&P) building societies and the group’s intermediary-only lending arm Accord Mortgages.
This is the widest choice of products available from any UK lender for borrowers with a 5% deposit, and increases the current selection of 95% LTV mortgages by 56%.
The group also claims to be the only lender to provide offset mortgages at 95% LTV.
None of the mortgages are part of the Help to Buy scheme or require any family guarantee.
They are available for all home buyers and movers, with access for remortgage customers due to be rolled out in early 2014.
Mortgages with no product fee and £500 cashback on completion also form part of the range.
Yorkshire's group chief executive Chris Pilling said: “We support the intentions of the Help to Buy Mortgage Guarantee scheme in encouraging more lenders to provide lower deposit mortgages but are able to deliver on its aims without relying on government support.
“House prices have stabilised and improved recently to make this the right time for us to offer such a wide selection of competitive 95% LTV mortgages, and they address the toughest obstacle faced by first-time buyers, and some next-time buyers, which is raising a big enough deposit."
The launch follows Yorkshire's research showing that 88% of-first time buyers believe they will find it difficult to raise a 10% deposit.
It also showed that 25% of first time buyers, home movers and remortgage customers favoured traditional lending outright compared to Help to Buy.
Comments
Just a gimmick.
These 95% mortgages have been available for some time. Even the government backed 95% mortgage looked like hot air, as existing products were already on the market.
That in mind, none have resolved the problem. There are only 2 possibilities:
1) People can't even manage the 5% needed to get on the market.
2) They simply can't afford the payments.
In either case it would suggest the disposable income of the wider public is insufficient and strangling the entire market. Not only would that affect the housing market, but also the retail market.
That alone is not the full extent of the damage. As less money moves through the system, less tax is taken at every stage, further choking the government and encouraging ever greater cuts and tightening. A circle that would inevitably continue for a long time into the future, as we have witnessed the past few years.
How do you fix it? The same way it's always been fixed in the past. It was allowed to break. Prices plummeted back into affordable ranges. A new wave of buyers shot out, with greater confidence in future returns. More investment rose, and once again the prices bounced to full recovery, the new buyers having greater disposable income due to lower mortgage commitments.