Weekly Roundup - Accord offers help to first-time buyers
By Taylor Brown
4th April 2024
Financial Reporter Broker's Choice Awards

First up some exciting news! We're delighted to share that Rita Kohli has made the Rising Star shortlist in this year's Financial Reporter Awards - We're very excited and wish her the best of luck in the finals - stay tuned for details on how to vote! You can learn more here.

Accord's 1% Deposit Mortgage - A Closer Look

The 1% deposit mortgage by Accord Mortgages Limited is an innovative new product targeted to help first-time buyers step onto the property ladder.

Lower Deposit Requirement

The most significant advantage of a 99% mortgage is that homebuyers won’t have to save for years to build up a deposit if they want to buy a property.

Increased Accessibility

This type of mortgage could make homeownership accessible to those who might otherwise struggle to save a larger deposit, particularly if they’re currently renting.

However, it comes with certain restrictions, for example -

  • At least one applicant must be a first-time buyer, defined as never having previously owned a property.
  • The application cannot include background properties like buy-to-lets.
  • It's only for residential mortgages
  • Applicants must have a minimum £5,000 deposit.
  • The product can be used to buy a property worth up to £500,000.
  • You will need to pass stringent affordability and credit checks.

But be warned, there is a lot to think about before you jump into taking a mortgage where you only own 1% of your home -

Risk of Negative Equity

If property prices fall, borrowers could end up owing more than their property is worth. This situation, known as negative equity, can make it difficult to remortgage or sell the property.

Higher Interest Rates

A 99% mortgage will naturally have higher interest rates than a mortgage with a lower Loan-to-Value (LTV) percentage. This could lead to higher monthly payments.

Stricter Affordability Checks

Borrowers will likely have to pass stringent affordability assessments and credit scoring, particularly if borrowing more than 95% LTV3.

It’s important for potential borrowers to carefully consider these factors and seek professional advice before deciding on a 99% mortgage. While it can provide a valuable opportunity for first-time buyers, it also comes with its own set of risks and challenges.

HSBC Goes Green and Introduces Offer Extensions

HSBC are joining the green revolution and is now incentivising energy-efficient housing by offering additional cashback to customers purchasing or remortgaging properties with high EPC ratings. They've also updated their mortgage offer extension rules, now allowing -

  • Non-new build mortgage offers to be extended from 180 to 210 days.
  • New build mortgage offers to be extended from 180 to 270 days.

This change underscores the importance of flexibility in the home-buying process and supports sustainable housing initiatives. But an offer extension can only be requested where -

  • the original offer is within the last 30 days of the offer validity period
  • there are no other changes to the application or the customer's personal circumstances.

The Latest Lender Moves - Rate Cuts and New Options for Borrowers

Aldermore Bank has refreshed its buy-to-let mortgage options, introducing limited edition rates that are especially attractive for landlords looking to expand their portfolios. This update further improves options for investors after a tough couple of years and underscores the bank's commitment to supporting landlords.

Gen H, Leeds Building Society, The Mortgage Works and Barclays all announced reductions to some of their mortgage rates this week. These adjustments span across various products, including notable decreases in low LTV products and enhancements in affordability for both residential and remortgage ranges.

We're hoping to see continued reductions in the coming months as these rate cuts are instrumental for buyers navigating the current market and reflect the ongoing adjustments lenders are making to remain appealing to borrowers.

Your home may be repossessed if you do not keep up repayments on your mortgage. You may have to pay an early repayment charge to your existing lender if you remortgage. Not all Buy to Let Mortgages are regulated by The Financial Conduct Authority.

US Inflation and Its Ripple Effects on the UK Mortgage Landscape

As the markets react to surging US inflation what does it mean for interest rates back home? How are lenders reacting to the news and what changes have happened this week that may make it easier for some self-employed to secure a mortgage? Insight into US Inflation and Its Potential UK ImpactWith a powering economy,

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