First-time Buyers
Help to Buy 2 opens door to sustainable 95% LTV market – expert
Borrowers will have a wider choice of privately insured 95% loan-to-value mortgages thanks to the ‘catalyst’ of Help to Buy 2, a broker has suggested.
According to John Charcol senior technical manager Ray Boulger, lenders’ preferences for private mortgage insurance could also help the government exit from the scheme.
He said: “The signs are that Help to Buy 2 will be the catalyst that brings many lenders back into the 95% market, although the majority will probably buy their mortgage insurance from the private sector rather than the government.”
While competition will push rates down for higher LTV mortgages, he added, the regulator’s capital requirements mean 95% LTV mortgages may remain expensive.
Earlier this week, Hanley Economic Building Society announced it will continue with private mortgage insurance rather than using the Help to Buy mortgage guarantee scheme, after deciding there is little difference in price.
