High demand for mortgages from first-time buyers

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The government’s Help to Buy mortgage guarantee scheme has ended, but this has not decreased the number of first-time buyers applying for mortgages, says a February 2017 Moneyfacts.co.uk article.

The Help to Buy mortgage guarantee scheme was launched in response to the difficulty first-time buyers were having saving for a large deposit for their first house. It allowed buyers to raise deposits of between 5% and 10%, with the government guaranteeing the mortgage in case of default.

Since the scheme ended in late 2016, several mortgage lenders have been offering 95% loan-to-value mortgages that enable first-time buyers to complete a house purchase with a 5% deposit. Moneyfacts.co.uk has reported that the number of loan-to-value mortgage deals has risen by 38 each month. There are now 248 high loan-to-value mortgages available for first-time buyers.

Demonstrating their popularity, the Yorkshire Building Society announced that it has seen the number of 95% mortgage applications rise by 50% compared to 2015.

There are signs that mortgage interest rates may increase soon, which makes it an ideal time to apply for a low-interest rate mortgage.

A mortgage broker can find the best high loan-to-value mortgage deals for people who want to buy their first home. Although the mortgage guarantee schemes have come to an end, borrowers can protect their mortgage payments by taking out mortgage protection insurance that will cover the monthly repayments in the event that the mortgage holder loses their salary because of sickness or an accident.

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