Consumer finance site mform.co.uk says remortgaging fears are overblown as a result of the liquidity crisis.
The company says remortgage deals are still available to consumers. Its analysis shows average loans-to-value for borrowers buying in the past three years range from around 58% to 68% putting customers who are remortgaging this year in a stronger position than feared.
Customers remortgaging through mform.co.uk have average LTVs of 52%.
Francis Ghiloni, marketing and business development director at mform.co.uk, says: “Lenders have a significant part to play in calming the current situation by ensuring that they make mortgage funds available at a sensible price to good quality customers. Lenders have to shoulder the blame for some of the current situation.
“Mortgage customers are undoubtedly facing challenging times but they are not as bleak as is being painted. People coming off two, three and five-year fixed rate deals this will face higher monthly payments.
“However they will have benefited from house price increases and that will have enabled them to build equity and to substantially improve their loan-to-value.
“Panic about the UK heading for a worse house price crash than the US is unhelpful and speculative. Worse still the doom-mongers’ predictions could become a self-fulfilling prophecy. If borrowers become scared that prices will fall they will be less willing to invest and the fall will happen anyway.”
Analysis by mform.co.uk shows average mortgage advances in 2005, 2006 and 2007 were £114,078, £126,012 and £134,801 respectively.
Given average house prices are now around £196,000 customers borrowing in those years will now have lower loans-to-value.