First-time buyers rejoice – 95% mortgages are surging - Which?

First-time buyers rejoice – 95% mortgages are surging – Which?

A website that reports on financial matters has a feature on the rise of 95% loan to value (LTV) mortgages in the UK. These are loans in which the buyer has to deposit only 5% of the value of the home. LTVs were once popular, with 900 types available in 2007. A financial downturn reduced the number to six by 2009. Now, the number is 288. The writer cautions buyers that the 95% loans have higher interest rates. The reader is advised to contact a mortgage adviser.

Key Takeaways:

The past decade has seen an increase in products for people wanting a 95% mortgage.
95% mortgages can be an advantage to people who do not have a lot of money to put down for their first house.
Buyers should take caution that 95% mortgages can have higher interest rates and sometimes cost the homeowner more in the long term.

“A 95% mortgage allows you to secure a property with a smaller amount of cash up-front, which can be a boon for first-time buyers.”