Good news for first time buyers
First-time buyers with small deposits are being courted by lenders with lower interest rates on 95% mortgages.
New figures from Moneyfacts have shown the average rate on a 95% mortgage has decreased by more than half a percent, which is good news for people looking to get on the property ladder.
The stats show that the average rate on a 95% fixed-rate mortgage has dropped by 0.54% in the past six months.
It's fallen from 3.95% to 3.41%, which could save house buyers thousands.
The lowest rates come from building societies, but some big banks are offering decent deals too as competition has forced them to drive down prices.
But remember, if you choose to borrow from a smaller building society, it’s pretty vital to remortgage at the end of your fixed term because many of them have revert rates, or standard variable rates, which are considerably higher than many of the larger banks.
It represents a huge shift in the way people are paying for their houses.
Several years ago it was normal for people to take out a mortgage with a 25-year term, but house prices have risen so much faster than wages over recent years so now buyers with small deposits are increasingly opting for terms of 30 or 35 years, and in some cases even longer.
A house is the biggest investment and, possibly, gamble that you can make, so be sure to get it right.
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