25-02-2008
New deposit increases for homebuyers
News by Adfero for Simply Business - independent providers of public liability insurance, business finance, landlord insurance, buy-to-let mortgages & commercial mortgages.
UK homebuyers are to be required to pay higher deposits in order to fend off higher interest rates.
Reports have highlighted a decision by Nationwide to require homebuyers to submit a deposit of at least 25 per cent and contrasts with an earlier policy of allowing those with deposits of ten per cent to access the lender's most favourable interest rates.
"We're not seeing anybody going after market share. Instead they are increasing margins," said Melanie Bien, a representative from mortgage brokers Savills Private Finance, in a report by the Guardian. "Six months ago you could find tracker rates at just below the Bank of England base rate, but now they are at least 0.5 per cent above base rate."
Moreover, Nationwide's decision coincides with an increase in the cost of borrowing, with mortgages of between 75 per cent and 95 per cent of a property's value attracting an interest rate increase of 0.2 per cent.