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90% Mortgage Loans

About 90 percent mortgages

There is some good news on the horizon for borrowers, as mortgage rates plummeted in early 2010 providing renewed hope for borrowers and lenders alike. Since the tightening of the belts to deal with the credit crunch, borrowers have watched previous 100% and 95% deals disappear out of the window.

But whilst borrowers want to borrow and lenders want to lend, there is still that ever present fear of getting burnt.

One enticing deal that has recently hit the market is that being offered by Bovis homes and Barclays of a 90% mortgage for buyers with low deposits who want to build a brand new home.

What is being offered is a mortgage of 4.99% at a fixed rate for two years, with only a 10% deposit required for those wanting to buy a Bovis home. The offer, being called The Perfect 10 by those in the know, is quite a lot cheaper than other 90% deals around which are charging in the vicinity of 5.98%.

The concept is specifically intended to help first home buyers who have to struggle to put together a reasonable deposit to buy their own homes at an affordable interest rate. With this option they do get a shot at a competitively priced mortgage.

There are a few bonuses included in the deal like free three year unemployment insurance, and a 500 payment towards the legal fees of the borrower.

Seeing a few more of these types of deals coming to the surface strikes a good note about the possibilities of helping the housing market get back on its feet for both the borrower and the lender.

It should be noted that the Perfect 10 mortgage deal is available to all customers buying a Bovis property in England and Wales.

Other companies are starting to follow suit with a return of 90% mortgages, with several banks and building societies like the Cooperative Bank and the Britannia Building Society offering new 90% fixed rate mortgages.

Cooperative Bank 90% Mortgage

If you've managed to save a 10% deposit you have the option of choosing between 6 mortgage products. There are some eligibility criteria however in that the total household income must be at least 20,000 p.a. and these offers are only available on repayment mortgages.

There are 6 options over different periods with varying rates of interest and fees, and once the initial fixed period ends each option reverts back to the bank's standard variable rate. Most of the products do require that you are a current account holder with the Cooperative Bank.

It is reassuring to buyers to see that banks and building societies are starting to offer mortgages to help those with a low deposit, especially after the disappearance of the 100% and 95% mortgages of the past. Admittedly the interest rates are somewhat higher than the deals with larger deposits to put down, but it's a good start, and hopefully we will be seeing a lot more changes in the near future.

How Do I Apply?

In most cases you need to contact the bank by telephone and arrange an appointment with a financial consultant. This consultant is able to advise you in regard to what your best options are in getting the mortgage that is most suitable for you.

If you want to do a bit of preliminary checking up as to how much a 90% mortgage like this might cost you it is worth paying a visit to the websites of either the Cooperative Bank or the Britannia. They both have online calculators where you can input some figures and work out projections on what the benefits and costs involved with the various products are, before you have your meeting with the consultant.

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