1.5m mortgage applications rejected in just 5 years
Research from new financial services company Castle Trust shows that 1.57 million mortgage applications - worth £227bn - were rejected in the past five years.Of those people interviewed who have been rejected for a mortgage over the past five years, 60% were first-time buyers. Just over one in five (22%) were to move to another home, and 11% were for re-mortgages. Some 3% were to take a further advance on an existing mortgage, with 4% for ‘other purposes’.
Castle Trust warns that it could become harder to secure a mortgage because further research reveals that because they now have to hold more in capital reserves, 71% of IFAs believe the amount banks will be willing to lend will be lower than historical levels. Furthermore, 72% anticipate that mortgage rates will increase over the next five years.
Castle Trust is offering a new type of mortgage, called Partnership Mortgages. These are for 20% of the value of an owner occupied home alongside a repayment mortgage of up to 60% from a traditional lender and a deposit of at least 20%.
Sean Oldfield, chief executive officer, Castle Trust said:
“Buying a home is the most important financial decision most of us will ever make. Our Partnership Mortgage can make that decision safer for homebuyers because they only pay interest each month on 60% of the value of their home with a deposit or equity of 20%. It is also safer for lenders, who can lend to more customers with less capital per customer.”