Statistics on higher LTV products are misleading

22 March 2010

I was interested to read on Mortgage Strategy Online last week that the number of mortgage products available has hit 2,053 - a 70% increase on the 1,209 available on April 1 2009.

The article states that on April 1 last year there were three deals available at 95% LTV compared with 13 today, and 71 at 90% LTV compared with 152 now.

These figures just go to prove that statistics are misleading.

In England at least I can’t see any broker products at 95% LTV but I can find a few direct deals.

We have a small group of lenders deciding when they have reached their unambitious lending targets, then dropping out for a while

I can also find variants of 90% LTV deals that statistically make it seem like there are more at 95% LTV.

In the real world of mortgage practitioners these deals may be OK if your customer is a prime, high-scoring borrower.

If they are anything else - for example, if they missed a mobile phone payment in the past six months or could be labelled light, medium or heavy or adverse or, heaven forbid, are self-employed with less than two years’ accounts - forget it.

When we get back to 20,000 or 30,000 mortgage deals in the market the news may raise a cheer from me. In the meantime we have a small group of lenders deciding when they have reached their unambitious targets then dropping out for a while. While this lack of competition persists direct deals and low SVRs will continue to make brokers’ lives difficult.

DANNY LOVEY
PROPRIETOR
THE MORTGAGE PRACTITIONER

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