View more on these topics

Number of 90% LTV deals doubles

The number of providers offering fixed-rate loans with a 90% LTV or higher nearly doubled in the last 12 months, research from MoneyExpert.com shows.

Its analysis shows there are 147 fixed-rate products available for those wishing to borrow 90% or more of the value of their property.

This represents an 88% increase on the 78 products available this time last year.

The fixed-rate mortgage market as a whole has expanded considerably, by around 46% in terms of products available, since February last year but these latest figures suggest a growing inclination towards higher LTV lending. The average LTV on a fixed-rate mortgage is now 76.8%, up from 75.7% 12 months ago.

Borrowers looking for a high LTV on a variable rate mortgage will have fewer options. The number of variable products available has tripled since this time last year, but the number of high LTV products (those with an LTV above 90%) has shown just a modest increase from 43 in 2009 to 51 now.

Pierre Williams, head of research at MoneyExpert.com, says: “For those looking to borrow a sizeable percentage of the value of their home this is clearly good news. Lenders have been risk averse in the past year and have shied away from high LTVs. Measured optimism over the housing market, though, seems to be encouraging higher value lending.

“It’ll be interesting to see how other provides react in the coming months. We’re some way off the flurry of 100% deals of previous years and that is a good thing to some extent but it seems that door is opening up.”  

The increase in high LTV mortgages is not a trend excluding first-time buyers, often those for whom finding a large deposit is hardest. Although a significant number of 90% deals are not available to those waiting to get on the housing ladder, the number that are has increased from 75 12 months ago to 108 now.

Borrowers relying on higher LTV products will face paying higher rates on the deal. The average fixed-rate mortgage product is currently at 5.4%, well below the 6.3% average for deals with an LTV of 90% of higher. The same applies to a lesser extent on variable-rate products where the average rate is currently 3.9%. For variable products with an LTV over 90% the average rate is 4.8%.

Recommended

Keith Carby joins Metro Bank

Former Openwork chief executive Keith Carby has been appointed as a non-executive director of Metro Bank.

Race is on for retail funding

Although the launch of a £2.5bn retail mortgage-backed securities deal from The Co-operative Bank was a further sign that the securitisation market is continuing to thaw, there’s no getting away from the fact that it’s still not functioning properly. Without securitisation, there is no exit for loans originated, and the only viable model is deposit-based […]

Own-label mineral water for the FSA while firms drown

When I visited the FSA’s gleaming offices in Canary Wharf recently I was agog at the opulence before my eyes. The regulator even has its own-label bottled water, available sparkling or still. So the secret’s out – this is what we’re paying for. Obviously, tap water is not good enough for these fine people. Income […]

Value for money in DC pensions

The Pension Policy Institute (PPI)’s recent report “Value for money in DC pensions” tries to identify factors by which people can assess whether their pension offers fair value for money (VFM). Fiona Tait provides an overview of the findings. Positive Outcomes It is extremely hard to assess VFM in a pension. Press activity naturally focuses […]

Newsletter

News and expert analysis straight to your inbox

Sign up