HSBC UK is introducing a range of 95% LTV mortgages, which will be available initially through its broker partners.
Product features include: competitive interest rates starting from 3.49% for a 2-year fixed rate with free valuations and on product fee and for mortgages available up to £400,000.
Ray Boulger, senior technical manager at John Charcol, said: “Launching into that market is certainly good news. The more lenders in that market, the better because there’s more choice and it will help to bring prices down.
“If you look at the rates lenders charge at 60 and 80 % LTV, it’s quite a bit less than a few years ago so as lenders get more comfortable in this high LTV market, rates go down, so borrowers pay less for deposits.
“Because of the huge jump of interest rates in 90 and 95% LTV, people should look into the Help to Buy shared equity scheme.
“We know a significant number of people get help from Bank of Mum and Dad or Nan and Grandad. If you are getting family help, don’t’ be afraid to have the discussion of possibly lending 10% rather than 5% because you’ll get a much better deal.”
The highly competitive mortgages, have no booking fee, provide the choice of two, three or 5-year fixed rates, and are available to home movers as well as first-time buyers.
Tracie Pearce, HSBC UK’s head of retail products, said: “Much has been publicised about the difficulty first-time buyers face breaking into the housing market, particularly in London and the South East.
“Nevertheless, there is still a really strong desire for home ownership, with as many as 59% of first-time buyers recently telling us that they would be open to the idea of buying with someone they do not know.
“But with only a 5% deposit required for our new range of mortgages, no booking fees, free standard valuations, and stamp duty exemption up to £300,000, we hope to help first time buyers get a footing in the market with very little initial outlay.
“And with historically low interest rates monthly payments can end up being less than rent in some cases.
“The vast majority of prospective first-time buyers prefer having a helping hand through the home buying process, so we are pleased to initially make our 95% LTV mortgages available through our broker partners.”