Large deposits mean the best mortgage rates.
While many UK lenders have increased their high LTV offers, it remains true to say that the best mortgage rates are offered to those with the largest deposits.
Since the credit crisis UK lenders have severely restricted mortgage lending criteria. For a long while high LTV deals were highly restricted, and it is only recently that the number of mortgage products offered to low deposit buyers has increased.
Lenders remain risk averse and because those with a low deposit are considered to be higher risk, they are not offered lenders best mortgage rates. While the rates offered to first time and low deposit buyers are competitive historically speaking, they are not the lowest on the market.
To achieve a good mortgage offer applicants today need a high deposit, a good credit score and a relatively high income. Often first time buyers do not fit into this criteria.
As deposit size is used to determine the mortgage rate offered and monthly repayments due, we advise would-be home-owners to come up with as large a deposit as possible. There are generally much more competitive rates on offer with just another 5% deposit.
For instance the Post Office offer a 2 year fixed mortgage rate of 5.75% with a 10% deposit, by adding a further 5% this rate drops to 4.29%. Over a 2 year period for a £200,000 mortgage a saving of £5,840 could be achieved.
Whatever your deposit level Deal Direct are dedicated to finding the best mortgage rates on offer that suit your financial circumstances.
Call one of our highly skilled mortgage advisers today to source a great deal for you.
