Coventry offers 125% LTV for existing borrowers
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Coventry Building Society has introduced measures allowing existing borrowers with a maximum LTV of 125% to move home.
The measures will apply to existing customers who have an “excellent credit history”, but have been unable to move home as lower house prices have pushed down the level of equity they have available.
Coventry has introduced the system to revisit individual cases where borrowers need to move, for example to relocate for work, but where falling house prices have pushed these borrowers outside of the building society’s normal lending criteria.
No additional borrowing will be allowed but members who qualify will be able to move to a new property at their current LTV up to a maximum LTV of 125%.
Colin Franklin, sales and marketing director at Coventry, says “As a mutual this is what our members expect of us.
“We are offering a sensible level of support to people we have a relationship with who are facing real difficulty in moving home.
“The Coventry is known for its responsible lending and for treating customers fairly and while this move may only affect a few of our members it is a great example of where we are doing both.”
Nationwide introduced a similar deal for its customer back in July, which allowed existing customers in negative equity to take out a mortgage with an LTV of up to 95%, with a rate of 6.73% fixed for three years or 7.48% fixed for five years.
Customers could then borrow up to an additional 30% with increased rates of 7.23% and 7.98%.
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Readers' comments (15)
Mark Finnegan | 18 Nov 2009 12:54 pm
Unbelievable!!!
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@@@ | 18 Nov 2009 1:03 pm
guess this will be on news @ 10 making people think 125% LTV deals are back... another false advertising stunt like the Nationwide..
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Steve Rodley | 18 Nov 2009 1:13 pm
Isn't this how we got here in the first place?????
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Ketan Yadav - Avenue & Co Private Finance | 18 Nov 2009 1:18 pm
This clearly shows:
1. The lengths which lenders will go to in the current market to retain mortgage customers by offering deals that will tie them in longer by remaining with them.
2. How lenders continue to offer apalling rates to customers.
Our advice to clients with Coventry would be to remain on the lender's variabel rate (currently 4.49%) and wait till prices recover or alternatively, make overpayments on their mortgage to build up equity and remortgage elsewhere.
Coventry will however offer a 5.99% Fixed rate for 5 yrs to 90% LTV to existing privelidge customers so why not offer them this?
These products simply reflect the dire market for mortgages and how lenders will offer any 'carrot' to unsuspecting customers who don't seek professional advice from independent mortgage advisers.
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Joe Adamson | 18 Nov 2009 1:19 pm
Did the people saying "unbelievable" or "Isn't this how we got here in the first place?" even read the story? If even mortgage brokers are going to follow the ignorant media and political line labelling even these limited schemes allowing people in negative equity to move home (without increasing their ltv) then we are truelly doomed.
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Anonymous | 18 Nov 2009 1:20 pm
A useful option for existing customers that might help a few out. Not helped by a rather sensationalist headline.
In answer to Steve Rodley: no it isn't. Please read the article again.
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Anonymous | 18 Nov 2009 1:28 pm
Ketan Yadev: so your advice to someone who *needs* to move house, is "Don't move house"?
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Mark Kelly | 18 Nov 2009 1:53 pm
These comments demonstrate that lenders and brokers alike vary in quality, expertise and subject matter knowledge.
Buyer beware still very much in existence in 2009!
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Jonathan Smith | 18 Nov 2009 2:02 pm
This will cause more problems in the future just to satisfy the short term needs of a few, No new mortgage advance should be every be greater then 100% of the open market value of the property. Seen it all before will end in tears for someone.
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Jamie A | 18 Nov 2009 2:06 pm
This is a good move, there is no additional risk to the society and it does not tie the clients in any longer - and actually is a great service to the societies existing clients.
Cant see why anyone could think any different.
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