95% Mortgages Explained
95 % mortgage advice 95 % Mortgage
95 % mortgages where you must provide a deposit of 5% of the purchase price.
There are many mortgage lenders that offer competitive 95% mortgages, though many lenders offer better interest rates at 90% loan to value.
Mortgage income multipliers can be lower for 95% mortgages compared with mortgage lenders income multipliers for 90% borrowing.
Most 95% mortgage lenders charge a fee called a "high lending charge " when you take a 95% mortgage. This fee can often be added to your mortgage though this will increase the total amount payable for your mortgage. There are mortgage lenders you do not charge a high lending fee for 95% mortgages. If you would like advice on 95% mortgages, complete our mortgage advice form for independent mortgage advice.
Pros and Cons of of 95 % Mortgages
Advantages
- You can buy a home if you have a small deposit
Disadvantages
- Higher interest rates compared to mortgages with a lager deposit
- High mortgage set up costs as many 95% mortgage lenders charge a higher lending charge
95% Mortgage and High Lending Charges
When searching for the best 95% mortgage it is not only the mortgage that is important to look at. Many mortgage lenders that offer 95% mortgages charge a high lending charge which although can be added to the mortgage this fee can be a very high. Below are examples of high lending charges for 95% mortgages and the impact they can have on your monthly mortgage repayments when you add them to your mortgage.
Purchase Price |
95% Mortgage
|
HLC |
Total Mortgage Amount
|
5.0% Interest |
Total Extra Payable over the Mortgage Term |
|---|---|---|---|---|---|
| £100000 | £95000 | £0 |
£95000 |
£555.36 |
- |
| £100000 | £95000 |
£1450 |
£96450 |
£563.83 |
£2541 |
| £150000 | £142500 |
£0 |
£142500 |
£833.03 |
- |
| £150000 | £142500 |
£2175 |
£144675 |
£845.75 |
£3826 |
| £200000 | £190000 |
£0 |
£190000 |
£1110.71 |
- |
| £200000 | £190000 |
£0 |
£192900 |
£1127.66 |
£5085 |
| £250000 | £237500 | £2900 |
£237500 |
£1388.39 |
- |
| £250000 | £237500 | £3625 | £241125 |
£1409.58 |
£6357 |
Higher lending charge based on 7.25% on the loan amount above 75% of the purchase price. Mortgage payment based on a repayment mortgage over 25 years with an interest rate of 5%.
Which Lenders charge a High Lending fee at 95%
When searching for a 95% mortgage using Go Direct Mortgages you can refine your search using our mortgage calculator with the fee filters "No higher lending charge (HLC)". Below we have selected 10 mortgage lenders than offer 95% mortgages and marked if they charge a high lending charge on 95% mortgages.
Mortgage Lender |
95% |
Higher Lending Charge |
|---|---|---|
| Abbey | 95% | Yes |
| Alliance & Leicester | 95% | Yes |
| Cheltenham & Gloucester | 95% | No |
| Chelsea B S | 95% | Yes |
| Halifax | 95% | Yes |
| Nationwide | 95% | No |
| Northern Rock | 95% | No |
| Royal Bank of Scotland | 95% | Yes |
| Scottish Widows | 95% | No |
Correct as of 30/03/2007
95% Mortgage Lenders Maximum Borrowing
When looking at 95% best buy table it is important to realise that mortgage lenders place limits on the maximum mortgage they will advance. In many cases a purchase price over £250000 will see many of the main 95% mortgage lenders offering lower loan amounts.
95% Self Cert Mortgages
If you are self employed you may qualify for a self cert mortgage of up to 95 % loan to value. These self cert mortgages are available via Go Financial Service, if you would like to find out more about 95 % self cert mortgages please complete our mortgage enquiry form to speak to an independent mortgage advisor.
95% Remortgage
There are many mortgage lenders that will allow you to release capital by Remortgaging though the reasons allowed from lender to lender. Below are the reasons and maximum loan to value %
Alliance & Leicester |
Abbey |
||
|---|---|---|---|
| Reason | % | Reason | % |
| Capital Raising | 95% | Capital Raising | 85% |
| Home Improvements | 95% | Home Improvements | 95% |
| Debt Consolidation | 95% | Debt Consolidation | 85% |
| School fees | 95% | School fees | 85% |
| Holiday/Car | 95% | Holiday/Car | 85% |
| Buy other property | 95% | Buy other property | 95% |
Business Purposes |
Not Accepted | Business Purposes | 75% |
| Divorce settlement | 95% | Divorce settlement | 85% |
| Unencumbered Property | 90% | Unencumbered Property | 95% |
Correct as of 30/03/3007
Do you want fee free 95% mortgage advice?
For 95% mortgage or remortgage advise please feel free to contact us for independent mortgage advice from a professional mortgage advisor.
You may also be interested in:
- Mortgage Protection Insurance
- How Much Can I Borrow
- Best Mortgage Type
- Fee Free Mortgage Advice
- Mortgage Repayment Guide
We normally do not charge a fee for mortgage advice, however a fee paying option is available. Our typical fee would be £500
Self Cert mortgage
The overall cost for comparison is 7.6% APR. The actual rate available will depend upon your circumstances. Please ask for a personalised mortgage illustration. Rate correct as of 15/03/07
REPAYMENTS ON YOUR MORTGAGE
Think carefully before securing other debts against your home, your home may be repossessed if you do not keep up repayments on your mortgage.
Go Direct.co.uk is a trading style for website purposes of Go Direct UK Ltd. Go Financial Services is a trading style of Go Direct UK Ltd which is an appointed representative of Personal Touch Financial Services Ltd which is authorised and regulated by the Financial Services Authority Registered in England & Wales Company 5703224.
We normally do not charge a fee for mortgage advice, however a fee paying option is available. Our typical fee would be £500
