Autumn Statement 2013: Virgin & Aldermore join H2B
Chancellor George Osborne has announced that Aldermore and Virgin will join the Help to Buy Scheme this month.
RBS, NatWest, Halifax and HSBC have joined the scheme and announced their product details.
RBS and NatWest are offering a two-year fixed-rate deal mortgage at an interest rate of 4.99% and a five-year fix at 5.49%. Neither come with fees. The banks are taking applications from today.
Halifax has announced two two-year fixes. One has a rate of 5.19% and comes with a fee of £995, and the other has a rate of 5.59% but is fee free.
HSBC is offering new homebuyers two fixed-rate mortgages up to 95% loan to value (LTV) from Monday 25 November. The bank will launch a two-year deal at 4.79% and a five-year deal at 4.99%, both reverting to the lender’s standard variable rate (currently 3.94%) with a booking fee of £99.
Santander, Barclays and OneSavings Bank will also join the scheme but have yet to say when they will start taking applications or announce interest rates and fees.
Loan to value
The LTV shows how much of a property is being financed and is also a way to tell how much equity you have in a property. The higher the LTV ratio the greater the risk for the lender, so borrowers with small deposits or not much equity in the property will be charged higher interest rates than borrowers with large deposits. The LTV ratio is calculated by dividing the loan value by the property value and then multiplying by 100. For example, a £140,000 loan on a £200,000 property is a LTV of 70%.