Moneysupermarket predicts growing deposits

Comparison site Moneysupermarket has expressed affordability fears as lenders start to refuse the option to add fees to 95% loan-to-value (LTV) mortgages.

Abbey recently announced that the total booking fee can no longer be added on to its 95% range, meaning borrowers must pay these additional costs upfront.

Louise Cuming, head of mortgages at Moneysupermarket, said: “I suspect the Abbey decision has been driven by decreasing house values.

“Adding fees onto a 95% mortgage effectively means the lender is exceeding 95% from the outset, something Abbey is clearly nervous about doing in the current climate.

“I fear this will be a growing trend leaving applicants for 95% products not only needing a 5% deposit, but savings to cover fees, Stamp Duty and solicitors costs as well. Financially, borrowers will be better off in the long run if they do not add fees onto the mortgage.

“However, for cash strapped first-time buyers having to find this amount upfront is yet another hurdle on the way to homeownership.”