New Help to Buy mortgages for older properties from Abbey / Santander
Santander has finally launched is range of help to buy two mortgage products which are focused on older properties under the government’s help to buy scheme.
First off I would say they’ve probably come out with the best product out in the market currently with a 4.99 rate and no fees which is beneficial for first-time buyers as it will help with the upfront costs of buying a property.
From a service point of view Santander is one of the best lenders out in the market and the fact that product also comes with a free valuation really does help those wanting to purchase a property quickly. However I still got my doubts over the whole concept of help to buy and what it’s doing to certainly the London property prices. My advice is always save more and try to buy the property outright. At 95% you are taking a major risk if rates rise or prices drop and when that happens dont look at George to bail you out.
Our new 95% LTV products are:
- 2 year Fixed at 4.99% (APR 4.9) to 02/04/2016
- 5 year Fixed at 5.49% (APR 5.2) to 02/04/2019
- 2 year Tracker at 4.99%, Bank Base Rate +4.49% (APR 4.9)
All of these products have the following added features: free valuation; no arrangement fee; and a £250 cashback.
Santander is one of the leading UK lenders and their lack of support to date for Help to Buy 2 Mortgage Guarantee Scheme was noticeable and it is therefore a relief that they have joined the fray. In their defence the delay was mainly down to the infrastructure and systems changes they needed to make internally to support this new venture.
There are a choice of products and Santander have an excellent reputation for speed of service. The products are up to 95% i.e. just a 5% deposit, and within the product range there are options without valuation or arrangement fees which is suited for applicants on a tight budget.
In my experience so far the affordability assessment is might tougher than their normal mortgages. With returns of about four times (rather than five times) income.
The rates are high when compared to 90% offers as the small deposit requirement reflects a greater applicant risk to the lender. The five year fix in particular looks out of kilter as the lender’s standard variable rate is 4.75%.
There are other 95% mortgage alternatives out there so I suggest you seek professional and independent advice when considering Help to Buy mortgages.
We are aware that a lot of the builders operating in the Help to Buy market are recommending their ‘preferred partners’ at a premium. The partners may not be independent or may have a vested interest in the property deal so by careful in your selection.
At Niche Advice we are totally independent and impartial this means we are not owned or affiliated to any property developers or financial institutions and will always look after your interests.
For more information on help to buy mortgages please contact us on T: 020 7993 2044 or alternatively complete the online enquiry on the right-hand side of this page.
Payam Azadi is a partner at Niche Advice Ltd who are Independent Financial and Mortgage Advisers in London.