Ulster Bank brings back its 90% mortgage deals
Good news for first-time buyers struggling to raise big deposits
THERE is hope for house-buyers who have not been able to save up a big deposit after Ulster Bank announced new 90% mortgages.
The bank said it hoped the two and five-year deals — requiring people to put up just a 10% deposit on new homes — would open up the market to more people including first-time buyers.
It is the only one of five big lenders here to announce it has reverted to 90% deals.
At the outset of the pandemic, most lenders withdrew 90% deals — partly down to uncertainty over the crisis and its impact on the housing market.
But it has proved more buoyant than expected. The latest government property price index said the average house price here has grown by 2.4% to £143,205 over the last year.
It is understood Ulster Bank’s 90% deals are not available for new-builds, which will still need a 20% deposit.
It is believed there is no time or number limit on availability though the bank has indicated it is committed to “lending responsibly”.
Head of personal banking Terry Robb said: “For first-time buyers, raising a deposit is still the biggest challenge. By reintroducing our 90% offering, we are pleased to be able to expand our support for the market to include both home movers and first-time buyers, making it easier to take their first step onto the housing ladder.”
Danske Bank, meanwhile, said: “Danske Bank currently offers 85% LTV across our product ranges, but this remains under active review.”
Bank of Ireland confirmed it is not offering 90% mortgages.
AIB and Progressive Building Society did not address the question of 90% mortgages directly. AIB said: “All our lending is based on the customer’s ability to repay. This is to protect the customer from undue risk. Applications are dealt with on a case by case basis.”
And Progressive said it “consistently reviews and assesses the market environment in terms of its product offerings and supports its members throughout the mortgage process”.
A spokeswoman for financial services website Moneyfacts said 90% deals would help those “with lower levels of deposit or equity who may have felt they had very few options to move forwards with of late”.
“Seeing further providers enter this arena could be a sign that mortgage lenders are managing their operational demands and are keen to cater to these borrowers again.”
Conor Mulligan, head of housebuilder Lagan Homes, said 2020 completions had been 14% lower than expected — but only because of the six-week site lockdown.
But he said requirements for big deposits had not been problematic, adding: “It may well be that the shortage in the supply of new build has masked the impact this has on purchasers.
“This has been a strange year to say the least and it may well be with people not going on holiday and being unable or unwilling to eat out and socialise as normal that they have larger savings.
“We also found that the lockdown and the forced staying at home made many people reassess their accommodation and the tenure and many realised that they needed more space, larger gardens and needed to live closer to other amenities.
“I believe people bought houses this year who had no intention of purchasing pre-covid-19.”