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Richard Eagling, senior mortgages expert at NerdWallet, said: “While government-backed 95% mortgages have been welcomed by many, our research suggests that its benefits may not yet be widely known among potential buyers.”
The government-backed scheme allows first-time buyers and those wanting to move home a chance to do so with just a 5% deposit.
As of tomorrow its 90% loan-to-value (LTV) 2-year and its 60% LTV 5-year fee free fixes will be reduced.
The products will be available for purchase and remortgage customers and available on properties up to £600k, for a maximum of 30 years.
Credit scoring for the Mortgage Guarantee Scheme (MSG) is perceived to be at a high level due to stringent lending, which requires further attention, according to Mike Brown, director of Crystal Clear Financial Services.
Compared to the five deals available at 95% loan-to-value (LTV) earlier this year, choice for those with the smallest deposits has risen dramatically.
The launch of the MGS opens the door to a greater number of mortgage products suited to borrowers with smaller deposits, according to Davies.
The range of products include 2 and 5-year fixes, which are available to single or joint applicants, with the same rates whether taken out direct or through a broker.
A Barclays spokesperson said: “We are looking forward to supporting customers in their next steps as homeowners with the launch of two new 95% LTV products.”
The Mortgage Guarantee Scheme aims to help those with lower deposits onto the housing ladder, offering incentives to lenders in order to provide 95% LTV mortgages.