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Banks unveil new 5% deposit mortgage ranges under Government-backed scheme
19 April 2021, 13:24
The loans have been launched under the Government’s new mortgage guarantee scheme.
Major banks have unleashed a wave of new 5% deposit mortgages onto the market, as part of a new Government-backed scheme to help first-time buyers and home movers.
Here is a round-up of what some banks have said so far:
Barclays has two new products under the scheme. It is offering a two-year fixed-rate fee-free deal on loans of between £25,000 and £570,000, with a rate of 3.99%.
It is also offering a higher rate of 4.09% for borrowers who want to fix their mortgage for a longer period of five years.
The products are available to self-employed applicants, who can be first-time buyers or existing home owners, and they can be applied for through a broker or direct with Barclays.
The products are unavailable on new-build properties.
A Barclays statement said: “We are looking forward to supporting customers in their next steps as home owners.”
– HSBC UK
HSBC UK has unveiled four new products under the scheme, some with a fee and some without. The deals are available to both first-time buyers and existing home owners.
They are a two-year fixed-rate deal at 3.99% with a £999 fee, or one for the same period without this fee for a higher rate of 4.29%.
Five-year fixed-rate deals are available at 4.29% with a £999 fee, and 4.49% without this fee.
HSBC said its maximum loan size available through brokers is £500,000. For direct customers it is £400,000, but it will be increasing this to £500,000 at a later date.
To qualify, the home must be the only property that mortgage applicants own and it will be their main residence. The property must not be a new-build or part of a shared ownership or shared equity scheme.
Michelle Andrews, HSBC UK’s head of buying a home, said: “After such a turbulent year it is great that this scheme will make a real difference in enabling first-time buyers who didn’t think they would have a chance of getting a mortgage and home movers to get the keys to their new home.”
NatWest is offering a two-year fixed-rate mortgage at 3.90% with no product fee.
It is also offering a five-year fixed rate at 4.04% with no fee.
NatWest said its deals are available to both first-time buyers and existing home owners. NatWest’s lending criteria will include both employed and self-employed customers.
Properties classed as new-builds are excluded and the home must be valued at no more than £600,000.
The scheme has launched initially through NatWest’s direct mortgage channel, with intermediary channels to follow.
Miguel Sard, MD of home buying and ownership at NatWest said saving up for a big deposit can often be difficult for younger people and first-time buyers, adding: “And we know people in these groups are some of the hardest hit by the effects of the pandemic. A Government-backed scheme will help segments of the market for whom home ownership has felt far out of reach in recent months.”
Santander will offer three deals with no product fee and a free valuation from Tuesday.
The three products, which are repayment mortgages for houses priced up to £600,000 or flats and leasehold properties up to £400,000, will be available to first-time buyers and home movers.
The mortgages will be a two-year tracker rate at 3.99%, a three-year fixed-rate at 3.99% and a five-year fixed-rate at 4.09%.
The products available under the scheme cannot be used on new-build homes.
Customers can apply directly with Santander or via a broker.
Brad Fordham, head of mortgages at Santander said: “We know that buying a home is expensive and finding the money for a deposit and the up-front costs can sometimes prove a barrier to potential home owners.”
– Lloyds Banking Group
The group’s brands Halifax (including Halifax Intermediaries), Lloyds Bank and Bank of Scotland are supporting the scheme.
They have launched a two-year fixed-rate deal at 3.73% with £999 fee or with a rate of 4.00% for no product fee.
A five-year fixed-rate deal is also available at 4.00% with a £999 fee or at 4.20% with no product fee.
All products are available for loans of up to £500,000 over a maximum 40-year term to purchase existing properties. Products not available to purchase are new-build, shared equity, shared ownership, or Right to Buy property.
Andrew Asaam, mortgages director at the Lloyds Banking Group, said: “The mortgage guarantee scheme will be a gamechanger for those trying to raise a deposit while often paying rent at the same time.
“We support steps to help make home ownership a reality for more people and are offering 95% mortgages through the scheme to both first-time buyers and home movers. We have also committed to lending £10 billion in 2021 to help people buy their first home this year.”