The 95% Mortgage Makes A Return – Will It Make A Difference?

Nationwide, one of the UK’s biggest lenders has announced that they are bringing back the 95% mortgage. Although this is a recognisably bold move considering the economic climate in the UK and the majority of banks and building societies remaining cautious about lending, it will only apply to existing customers. Nationwide’s 95% mortgages will be available only to existing customers who need to move home, not to first time buyers, the people who have small deposits and are most in need of a large mortgage.

Although the move by Nationwide may be the first step for lenders to begin offering this kind of deal, it would seem that most banks are a long way from offering good rates to first time buyers. The 95% mortgage comes with a substantial 7.18% fixed rate or their best tracker deal at 5.49%.
The best tracker deal for customers who have a fortunate 40% deposit is at a 4.49% rate. It is becoming increasingly commonplace for lenders to expect a significantly larger deposit, with the best deals available only for those who have such deposits. This is exemplified in the number of deals requiring a 40% deposit or more increasing from just 10 at the beginning of 2008 to 149 at the end.
Despite the Nationwide’s bold move, banks and building societies remain stringent with lending criteria as house prices fall, and many homeowners struggle to pay mortgages as they fall into negative equity.

The Bank of England released survey results this week which provide a gloomy insight into the finances of many households in the UK. The survey found an “abrupt” change in the circumstances of homeowners, with a significant decline in income due, in part, to the lack of credit available from banks. Lenders are proving hesitant to provide people with credit, and when they do it is at a high rate of interest.

With stringent lending criteria, those who wish to buy homes are priced out of the market due to high rates of interest and the only availability of mortgages reserved for those who have a significant sum as a deposit. Those who wish to sell their homes also struggle to find good mortgage deals alongside the difficult task of selling their home.

Swift Capital provides various services which can assist those who need to make a quick property sale. Whether you want to stop repossession of your home or simply want to sell their property without hassle, Swift Capital can offer you a way to release the equity from your home and can sell property fast. Contact Swift Capital today and we may be able to offer you a suitable solution as equity release UK experts.