First-time Buyers

Halifax and Santander announce launch of 95% mortgages

Christina Hoghton
Written By:
Christina Hoghton

The two large lenders are launching the products under the government’s Mortgage Guarantee Scheme, which it announced at the Spring Budget

Halifax has confirmed it will be launching its range of 95 per cent loan to value (LTV) mortgages through the government’s guarantee scheme at the start of next week.

On 19 April it will go live with two-year and five-year fixed products for first-time buyers and home movers with a five per cent deposit.

There are £999 fee and fee-free versions of each product – the two-year fixes are at 3.73 per cent and four per cent respectively with the five-year options at four per cent and 4.2 per cent each.

Mortgages are available on a repayment basis only and are for loans between £25,000 and £500,000 pounds.

Rate cuts and withdrawals

The lender is also updating its wider residential mortgage offering at the same time.

Selected rate reductions of up to 0.35 per cent are being made on two, three and five-year fixed rate first-time buyer, home mover and new build deals, for borrowers with a 40% deposit.

Among these, the two-year fixes with £1,499 fee and £999 fee for home movers and first-time buyers are being trimmed to 1.1 per cent and 1.11 per cent respectively.

The five-year versions will be reduced to 1.24 per cent and 1.28 per cent.

For new-build properties, the two-year fix with £999 fee is at 1.31 per cent, the three-year at 1.4 per cent and the five-year at 1.48 per cent.

Halifax is also withdrawing its two and five-year fixes at 60 per cent LTV for loans of more than £1m.

Santander back in 95% market

Santander will also be launching its 95 per cent loan to value (LTV) mortgages backed by the government’s guarantee scheme on Tuesday 20 April.

However it has not released many product details including interest rates, fee information and fixed or variable periods.

The deals are only available for first-time buyers and movers and do not include remortgages or self-employed borrowers. New build, shared ownership and Right to Buy applications are also excluded.

The government scheme permits a maximum property price of £600,000, the property must be the only residential property owned by the applicant and must be owner-occupied, and the mortgage must be on capital and interest payment basis.

Additionally Santander limits the maximum value of flats it lends on to £400,000.

Therefore, the maximum loan is £570,000 for non-new build houses and £380,000 for non-new build flats. And the maximum loan to income is 4.45 times.

For employed applicants Santander will require the latest payslip plus the latest three months’ personal bank statements.

Applicants must complete the lender’s mortgage guarantee declaration to confirm that they do not own any other property.