Young borrowers typically spend 12.3 per cent of their income on monthly interest payments, the lowest level since 2004, according to the Council of Mortgage Lenders. There is evidence, too, that lenders are accepting smaller deposits.
'Mortgage brokers say they have never seen five-year deals at this level before'
HSBC has announced its biggest ever allocation of loans to first-time buyers, saying it will commit £3 billion during this year. The bank has launched several fee-free deals, open to buyers with a minimum 10 per cent deposit. Deals include a two-year discount mortgage of 3.84 per cent and a two-year fix of 2.24 per cent.
Lenders have been cutting the cost of fixed rate loans over the past year because of the prospect of a continuing low bank base rate.
Chelsea Building Society has launched its lowest-ever five-year fixed rate loan at 3.19 per cent. Mortgage brokers say they have never seen five-year deals at this level before.
For those who want longer-term rate security, Norwich & Peterborough has launched a 10-year fix at 3.99 per cent, the cheapest such deal ever to have been offered in the UK. It comes with a fee of £295, but borrowers have to put down a deposit of at least 25 per cent.
Figures from Moneyfacts, the independent financial data provider, show that there are now 268 mortgage deals available at 90 per cent loan to value (LTV), compared to 199 a year ago. The number of 85 per cent LTV mortgages has risen to 540 today from 480 in January 2011. Reuse content