Mortgage pricing has risen over the last quarter despite first-time borrowers facing less product choice and paying increasingly more for their loans.
These are findings from AmTrust Mortgage LTV Tracker which reviews the average monthly mortgage payments for first-time buyers on average loan levels.
The research – which compares loans for those with a 5% deposit and those with 25% – shows that first-time buyers who opt for 95% LTV products can now expect to pay over 70% more than those who are able to put down 25% of their property’s value.
Pad Bamford, business development director at AmTrust Mortgage & Credit, said: “Given that first-time buyers tend to be in the former bracket, it is they who are suffering the most.
“First-time buyers might be lulled into a false sense of security if they read that there are hundreds of 95% LTV loans available for their needs – the true number is likely to be much less.
“We would therefore suggest that this is not a level of ‘normality’ that is able to support those borrowers who would like to get on the housing ladder but only have a small deposit to do so.”
Homeowners with a 5% deposit pay an average of £823 in monthly repayments, £341 more than the £482 paid each month by those with 75% LTV mortgages.
The Bank of England, average interest rates for 75% LTV mortgages have risen since the start of the year, and now stand at 4.19%.
Bamford added: “The uncertainty that has resulted from the General Election result and the Brexit negotiations is only likely to dampen the housing market further, and we are in danger of lenders continuing to retreat into their shells when it comes to high LTV lending.
“First-timer buyers with smaller deposits deserve far better than a market of one to five products which continue to come at a rising cost.”