There has never been so much choice of mortgage deals on the market as there is now, since the beginning of the Covid-19 pandemic. This is fantastic news for many as the past year has seen high rates and a decline in good deals. Compare Agents takes a look at what is happening to the mortgage market and whether it is actually becoming easier to get a mortgage.
The ongoing pandemic has had a huge effect on all elements of the UK economy including the housing market. As restrictions will at some point start to lift, we look at what this means for you and your mortgage.
The Moneyfacts UK Mortgage Trends Treasury Report, found that there are currently 3,215 mortgage deals available, the highest number since March when there were 5,222 deals in the market.
The biggest rise in deals over the last few months can be found on mortgages requiring a 10% deposit/equity – 90% loan-to-value (LTV) – which is good news for first-time buyers. This is accompanied by the average two and five year fixed rates at 90% LTV seeing the largest fall of all the lending tiers, reducing by 0.09% and 0.07%.*
First-time buyers have been hardest hit by the COVID-19 mortgage cull, but 90% mortgages have seen somewhat of an upturn lately. However, rates still remain high, with the cheapest two-year deal being around 1.5% higher than before the pandemic.
What about mortgage rates?
The increase in availability hasn’t necessarily led to cheaper rates. Average rates are rising slightly, with two-year deals now showing seven consecutive months of increase.
The speed of the rise seems to be slowing down though, meaning lower rates could be on the horizon…
A 95% mortgage is a loan for 95% of a property’s value. You must provide a deposit for the remaining 5%. So, if you want to buy a home valued at £200,000, a 95% mortgage will lend you £190,000 of the cost and you’ll need to have saved a 5% deposit of £10,000.
Due to COVID-19, 95% mortgages are currently very difficult to find and it’s not known when they will reappear on the market. So, if you’re looking for one, you may have to wait and in the meantime, try to save a larger deposit towards a home.
Is It Becoming Easier To Get A Mortgage?
Whilst more availability and longer lasting deals l is good news for homebuyers, it is still a complicated time to get a mortgage, although lenders are starting to ease the harsh new rules they introduced in 2020. For example:
Here are our top pieces of advice for improving your chances of getting a mortgage and getting the best mortgage deals:
Estate agents are often very keen to get you to use their in-house mortgage broker. They may have sales targets to reach each month. They will also earn a fee if you choose to use the in-house adviser which is why they can seem pushy.
That said, most in-house brokers will still give you mortgage advice based on your personal needs and should recommend the right mortgage for you having looked at a whole range of lenders. Don’t forget to compare estate agents as well as mortgages when it comes to selling your property.
You are free to move home during the pandemic. However, we advise you to compare estate agents and their fees, as the process of searching for and moving into a new home is different.
Compare Estate Agents in your local area We use real-time property sales data to give you performance details of your local estate agents.
We analyse the performance of every active estate agent in the UK and using basic information about your home, we provide you with a list of agents that cover your postcode and how they perform against each other.