Halifax gets tough on loan deposits

Halifax will penalise all borrowers who fail to stump up 25% deposits from today.

The UK’s biggest lender will add 0.14% to the product rate of borrowers taking out deals above 75% LTV.

But the lender will also reward cli-ents who put down more than 25% deposits by slashing their product rates by 0.1%.

Halifax has also unveiled a range of products for first-time buyers. Available from today, it includes a 5.69% five-year fixed rate deal at 90% LTV.

The lender has also adjusted its LTV bands. Products were previously categorised in two bands – 0% to 90% and 90% to 97%. From today this will change to three bands – 0% to 75%, 75% to 90% and 90% to 95%, so the minimum deposit required has risen from 3% to 5%.

The penalties and LTV changes also apply to Intelligent Finance and Bank of Scotland deals.

David Hollingworth, mortgage specialist at London & Country, says: “There are two ways to look at it. Sub-75% rates have been cut and that’s a good thing and should be applauded.

“But those with smaller deposits will end up paying higher prices as all lenders are looking for low-risk borrowers nowadays.”