It goes without saying that it’s been a turbulent year for most industries – and the mortgage market has been no exception.
The most notable change has been over the level of deposit that lenders have required borrowers to put down.
At the start of 2020, there was a good spread of lenders that would allow home buyers to purchase a property with as little as a 5% deposit. But as a result of COVID, this requirement changed dramatically… With some banks insisting on deposits as large as 40%.
Thankfully, the industry has started to adapt to the changing landscape, and we’re seeing plenty of progress made in a return to “normality” for home buyers.
Generally speaking, most lenders will now allow buyers to purchase with a minimum of a 15% deposit.
Although it was reported that a couple of lenders started to offer mortgages with as little as a 10% deposit – these generally came with quite restrictive terms and lending policy, and not everyone was able to qualify. As a consequence of this, there were very limited options available for people with a 10% deposit.
The good news is that we now have a choice of 6 lenders that can offer these mortgages with fairer terms. This has meant that some of the policy alongside them has now been relaxed, which has helped more people to qualify and help drive down the actual monthly payments.
As confidence continues to grow, the hope is that other lenders will continue to follow suit looking ahead to a more positive 2021…