First-time buyers facing 5% interest charges

Home loan interest charges may exceed 5% for some first-time buyers, the Sunday Times reports, as lenders push up the cost of borrowing for people with smaller deposits. Aldermore has announced mortgages for borrowers with a 10% deposit at 5.18% over two years, or 5.39% fixed for five years, with a fee of £999. From Tuesday, Lloyds Bank and Halifax will offer a two-year fixed-rate mortgage at 3.54% and a five-year deal at 3.59%, both with a £995 fee. The last time the average cost of 90% mortgages was this high was in January 2013, when fears of a triple-dip recession were widespread. The average five-year deal for people with a 10% deposit is now 3.92%, up from 2.94% in December 2019, according to Moneyfacts.

The Sunday Times (06/12/2020)