Challenger bank Aldermore is joining the second phase of the Help to Buy scheme, and launched several offers today. Aldermore will be offering mortgages for both new home purchases and remortgages under the mortgage guarantee scheme.
These will be the first Help to Buy mortgage guarantee products available for remortgages.
The bank will offer two-year fixed-rate products with a loan-to-value ratio of up to 90% at 4.93%. They will also offer a loan-to-value ratio of up to 95% with a rate of 5.28%. These mortgages will both have an additional £999 fee.
Lender Aldermore is also raising the loan-to-value ratio from 80% to 85% on some of its mortgages which are not part of the scheme.
Aldermore joins Royal Bank of Scotland, Lloyds Banking Group, HSBC and recent addition Virgin Money, by offering Help to Buy mortgage guarantee products.
On the Mortgage Solutions website, Charles Haresnape outlines his thoughts about Aldermore’s decision to join the Help to Buy scheme:
“Aldermore is committed to supporting the initiative and we had stated previously that we would introduce our products as soon as we could bring them to market.”
“We have taken the decision to [also] offer remortgages as we want to continue supporting creditworthy customers looking to improve their homes by allowing them to withdraw equity as necessary.”
Haresnape also discussed the potential effect of Help to Buy on the housing market:
“I do not expect the property market to overheat given the improving supply, strict lender checks on affordability and the fact that much of the UK has only seen modest house price increases so far. In the event this does happen, the Government can make adjustments to the scheme or withdraw before the three-year proposed term.”
Aldermore is one of Britain’s youngest banks, having launched in 2009. It was recently revealed by Sky News that Aldermore is in negotiations with leading city investors including Toscafund and Lansdowne Partners. It is thought that Aldermore is trying to secure £40 million in investment to expedite growth.