Nationwide has thrown a life line to those with minimal deposit on a house or flat. Nationwide now offer 95% loan to value mortgages, it seems these are for existing customers however the building society offers a tracker market 95% 2 year deal with a rate of 6.49% which will reduce to 5.49% from 1 January.
There is a hefty fee involved of £995 and clearly the mortgage is far higher (3.49% from Jan 1) than the current Bank of England base rate of 2.0%. Compare this to a 60% LTV mortgage with the same company which you can get at 4.88%. On reflection, its not that much worse and Nationwide are making a good margin on both mortgages.
Matthew Carter from Nationwide states “that this is part of our ongoing commitment to exiting customers” which sounds good to us. However it is a double edged sword, yes they are offering this service but it comes with a large fee and a very high interest rate so they seem to be hedging the bets. It’s a far cry from offering 95% LTV mortgage at say 4.00% and a nominal fee of say £299. But it’s a start.
Beware though of the 95% mortgage, make sure you do not rely on your house price going up as when you come to remortgage you might find that you are in negative equity and that is not fun for anyone involved and may lead to your house being repossessed.
There are other 95% mortgage products out there with the following available:
Direct Line – Rate of 6.39% until June 2010. Standard rate of 6.50%
Bank of Ireland 1st Start – Rate of 6.99% until July 2013. Standard rate of 7.09%
Bristol & West Mortgages First Start – Rate of 7.19% until July 2013. Standard rate of 7.09%
Coventry BS – Rate of 7.39% until Sept 2013. Standard rate of 7.09%
We can direct you to the best LTV mortgage, fill in the following mortgage deals form.