Bank scheme still not helping first-timers
Monday 17 December 2012
First-time buyers and those with small deposits have seen barely any benefit of cheaper loan costs from the Bank of England's Funding for Lending scheme so far, according to figures compiled for the Independent.
Banks and building societies have been using the cheap cash on offer to slash rates on mortgage products for less risky borrowers, but those with smaller deposits are largely missing out, according to financial information provider Moneyfacts.
Borrowers with a 5 per cent deposit must still pay 5.84 per cent on average for the typical two-year fixed-rate £150,000 mortgage, just 0.19 per cent cheaper than the 6.03 per cent average rate on offer before the FLS began in August. Those with bigger 40 per cent deposits are gaining savings nearly three times as big as average loan rates for similar deals have been trimmed from 4.47 per cent to 3.93 per cent. The high cost of mortgages – when the Bank's official interest rates are at a record low 0.5 per cent – comes as official census data show the share of households renting jumping from 9 per cent to 15 per cent over the past decade. Home ownership has fallen from 69 per cent to 64 per cent.
There are just four extra deals on the market – bringing the total now to 66 – catering for borrowers with a 5 per cent deposit since August. Tracker rates for those with smaller deposits have also fallen by less than 0.1 percentage points.
A Moneyfacts spokeswoman said: "The introduction of the Funding for Lending scheme has seen the mortgage market heat up, with an increase in mortgage availability in the past few months. Recently several lenders have launched new products with attractive low rates. But it appears that these cuts in rates and loans products are targeted to the already serviced 60 per cent loan-to-value market.
"Although it is good to see an increase in choice in the mortgage market, it does little to reduce the worry of those who require a higher loan-to-value deal."
- 1 What marriage would look like if we actually followed the Bible
- 3 The Chinese city where men have 'three girlfriends because there are so many women'
- 4 'Heartbreaking' Syria orphan photo wasn't taken in Syria and not of orphan
- 5 Orthorexia nervosa: How becoming obsessed with healthy eating can lead to malnutrition
Britain to take more refugees as Cameron bows to pressure after more than 250,000 back our campaign
Senior British politicians tell David Cameron: When dead children are being washed up on beaches – it's time to act
Jeremy Corbyn calls Osama bin Laden's killing a 'tragedy' - but was it taken out of context?
If these extraordinarily powerful images of a dead Syrian child washed up on a beach don't change Europe's attitude to refugees, what will?
If you're not already angry about the refugee crisis, here's a history lesson to remind you why you really should be
Make your voice heard: Sign The Independent's petition to welcome refugees
iJobs Money & Business
£16000 - £40000 per annum: Recruitment Genius: A Foreign Exchange Dealer is re...
£20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...
£20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...
£14000 - £16000 per annum: Recruitment Genius: This company was established in...