Positive moves in the high LTV sector

Maxing out on borrowing through an equity release scheme may not seem a normal thing to do but in fact it accounts for a reasonable share of the market.

Drawdown last year among brokers acc-ounted for nearly 40% of all new business but this is of little benefit to people who require a specific or maximum release of funds.

Recognising the importance of its position in the market, Stonehaven has extended its LTVs, outpacing its rivals.

Mortgage Express and New Life Mortgages have long since shared the market for high LTV products while competing at different age bands for the top LTV spot. Stonehaven’s wider launch into the market in Q4 2006 saw it step into this sector as well as others, but without any stronghold in the high LTV area.

It has now shown a determination to take a share of the market, but at a price for borrowers.

Its LTVs may top the market but they come at a price of 6.69% monthly compound interest (6.90% annualised). This is a considerable premium for the privilege of maxing out and is almost 1% above the lowest rate available for lower LTV options.

In reality, this rarely poses a problem for consumers because they have little choice if they want to raise the maximum amount.

While high LTV lending comes at a price, the good news is that the stretch in LTVs – especially for younger age groups – provides greater hope for those not necessarily looking for big loan amounts but rather a little extra.

Mortgage Express still leads the field on price and the rate difference is considerable, but whichever way you look at it, high LTV lending is improving where it is needed.