Lenders are withdrawing low-deposit loans in a blow to first-time buyers, experts warn
Barclays has become the latest lender to withdraw a 95pc mortgage amid fears among lenders that borrowers will fall into negative equity.
Low-deposit mortgages risk disappearing from the market, experts have warned, with remaining deals now charging close to 7pc. There are now just 32 loans available to customers with a 5pc deposit, according to analyst Moneyfacts, down from 35 a week ago.
Experts warned these mortgages, which are perceived as riskier by banks, could disappear as interest rates rise and house prices fall.
Karen Noye, of wealth manager Quilter, said: “Lenders will be looking to reduce the number of high loan-to-value deals in light of a potential looming house price crash that could throw new buyers into negative equity. Similarly, with the cost-of-living crisis in full swing, lenders will be wanting to take on less risk.”