Compare today’s 10% deposit mortgages
Since 2011, Mortgages for 10% deposit i.e. where you borrow 90% of the value of the property have become more competitive in terms of interest rates being reduced, however lenders criteria and assessment is stricter then applications for people who have larger deposits.
90 percentage mortgages are available to both the employed and self-employed, lenders will look to lend up to 5 times income, but usually go no more than 4 times, the smaller Building Societies will look to lend even less. 90 mortgages are available to both first time buyers and home movers.
Whatever type of borrower you are, it is pertinent to remember that the very best 90% mortgage deals for your circumstances may be any one of the following types of mortgages available; a regular fixed mortgage, discounted mortgage, tracker mortgage offer, or maybe an offset or current account mortgage. With this in mind, it really is important to consider what you want from your mortgage deal, and then seek a solution that suits. In addition to the type of mortgage you require, you should also take into account the initial period of the mortgage, which will generally be 2, 3 or 5 years.
When searching for 10% deposit mortgages (90 ltv), you should not only be comparing interest rate applied, but also the fees and charges, as these could make a significant difference to the overall expense. You should also take into account the standard variable rate of the lender especially when looking to take out a 2 year product as if you are unable to re-mortgage to a lower rate, for example 85% (15% equity), in 2 years’ time, you don’t want to be in the position of ending up on a higher rate.
Some lenders when looking to lend 90% Loan to Value mortgages, can impose a ‘higher lending charge’ in addition to its other charges, this is another element that can affect the competitiveness of any mortgage deal. As an incentive, some lenders will pay for the higher lending charge themselves.
In a perfect world, all would-be borrowers would wait until they had saved a bigger deposit ahead of applying for any mortgage. By doing so, they would both improve the choice of offered mortgage deals, and the month-to-month mortgage payment would also be reduced.
But for all those potential purchasers who are particular keen to get on the property ladder, looking for the most affordable high Loan to Value (LTV) mortgage deal on the market is certainly one way to compensate for this. Especially when taking into account how rents have risen, and interest rates of 90% mortgages have decreased, which has resulted in the pendulum swinging towards buying property rather than renting.
To demonstrate this; a property purchase in August 2013 of £200,000 with 90% lending of £180,000 would cost £875 per month on a 30 year repayment mortgage, whereas rent for the same property could be as high as £1100 per month, or even higher.
You’ll be able to use our “Best Buy” mortgage comparison tables above, to compare each of the 10% deposit mortgages currently on offer, however it is important to realise that you should make an appointment with a professional mortgage advisor, as the eligibility criteria, fees and terms for each mortgage product should be taken into account. The mortgage advisor will be able to find the best mortgage option for your personal situation.
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