Bank mortgage boost could help FTBs

FTBs may soon find it easier to get onto the property ladder as banks seek to boost their incomes from the mortgage market, a national mortgage broker has predicted.

Mortgage Experience CEO, Shaun Evans, suggested that since banks have needed to ‘ringfence their retail banking activity from their riskier investment banking arms,’ they need to find ways to boost income within this. Evans said he believes this has led to banks competing to gain a greater market share of the mortgage sector.

The CEO indicated this could be great news for borrowers because of low rates, not just from the Bank of England interest rates, but also because the banks are competing for lenders’ business.

Evans commented: “What we are already seeing is banks reducing the rates they are offering on higher LTV mortgages, which typically have higher rates because they are seen as riskier.

“This is great news for buyers at any stage but should have a positive impact on the FTB market in particular, because an FTB will be able to have less deposit and get a better deal.

“All we are really seeing at the moment is the banks making less money on their riskier mortgage business. However, if we can learn anything from the last crash, it’s to keep a careful eye on risky lending.

“As banks seek to continue to boost their income and gain greater market share of the mortgage market, we could see more riskier lending and customers being taken on who previously wouldn’t have been given a mortgage.”

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