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Mortgage predictions for first-time buyers..

Longer-term fixes, cashback offers and cheap 95% deals could lead the way.

Whether you’re a first-time buyer, a second stepper, a homeowner looking to remortgage or a buy-to-let landlord, 2019 looks set to be a rollercoaster of a year. With uncertainty around Brexit and the prospect of further base rate increases, being proactive with your finances and getting the best mortgage deal could be a new year’s resolution that saves you thousands of pounds in the course of 2019. We’ve analysed market activity in the past year and identified emerging trends in order to bring you our predictions for the 2019 mortgage market. No matter what your situation, Which? Mortgage Advisers can give you expert, impartial mortgage advice.

A brighter future for first-time buyers? If you’re thinking of buying your first home, now could be the time to get a good deal on a mortgage, with lenders increasingly offering competitive deals for buyers with small deposits. The 95% mortgage battle will continue When it came to mortgage rates, buyers with small deposits had a rough ride for a few years, but now the tide is turning.

Exclusive Which? research conducted in November found that 95% mortgages were getting cheaper – bucking the trend of rate rises at other loan-to-value (LTV) levels. The number of 95% deals also increased, with banks becoming increasingly competitive in their bid to win new mortgage customers. And with signs that other parts of the mortgage market are continuing to get more expensive, 2019 could see even greater competition at 95% LTV, and even better deals for first-time buyers. Find out more: 95% mortgage calculator 100% mortgages could make a return In some parts of the country, would-be homeowners struggled to build up even a 5% deposit and in November, the Building Societies Association encouraged its members to be more innovative in their approach to first-time buyers.

After the 2008 financial crisis, 100% mortgages (which require no deposit at all) died off, and the closest equivalents these days require family members to use their savings or homes as security. The return of 100% mortgages would be highly controversial, but it would be wrong to rule out the possibility of it happening in 2019. It’s likely that if lenders do launch 100% deals, they’ll be limited to certain professions or will only be available to people with the likelihood of significant inheritances. The number of higher income multiple mortgages will increase We’re already seeing signs of professional mortgages coming back on to the market, and that trend could continue this year.

While mortgage providers usually cap lending at 4.5 times the combined annual income of applicants, professional mortgages allow borrowers in specific professions (for example, doctors, dentists etc) to take out a home loan at up to 5.5 or even 6 times their salary. These income multiples are significant due to restrictions put in place by the Bank of England, which limit how many mortgages can be granted at more than 4.5 times an applicant’s income – a level it considers ‘risky’.

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