Bank of China hikes LTV to 80% in bid to expand UK market share

13 September 2010 | By Natalie Thomas

Bank of China (UK) is looking to in-crease its mortgage lending in the UK and has hiked its maximum LTV to 80.

On its residential range the lender has increased the maximum LTV to 80% from 75%.

The LTV on its buy-to-let range has risen from 65% to 75% while LTVs for commercial mortgages has gone up to 70%, also from 65%.

Bank of China (UK), which dis-tributes both direct and through brokers, offers rates starting from 2.8%, 3.88% and 4% on its residen-tial, buy-tolet and commercial ranges respectively.

Garry Sukhija, vice-president retail at Bank of China (UK), says: “We want to cement our position in the market and feel that now is the right time to increase our lending in the UK. The increase in LTVs reflects this.”

The bank uses retail deposits to fund its lending and is currently utilising under 25% of them, so Sukhija says it has the funds for more lending.
Ian Balfour, chief executive officer at Solent Mortgage Services, a packager on Bank of China (UK)’s panel, says the LTV hike is good news for brokers.

He says: “The lender is offering some good products and is looking for quality borrowers. It’s taking a responsible approach to lending and wants clients that it can build a relationship with.

“It’s a positive move when any overseas lender looks to the UK mortgage market. Bank of China (UK) has a branch network but it is committed to the interme-diary market.

He adds: “It has an old-fashioned underwriting process and does a lot of it manually.”

The bank has recently added All Types of Mortgages and TBMC to its distributor panel. It lends 4 x in-come or 3 x joint income. All clients have a face-to-face interview and it stress tests mortgage payments by assuming the Bank of England base rate is higher than it is.

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