Rates fall for deals at 90% LTV

The average rate for deals at up to 90% LTV has dropped by almost 2% in the last three months, according to Evaluate Technologies.

Average rates at 90% LTV have gone from 7% in November to 5.3% now.

Evaluate calculates that this has but monthly payments by £160 on a £150,000 loan.

But the best-buy rates available to borrowers with 90% LTV are still more than double the average 2.58% charged for borrowers at 60% LTV.

Evaluate says the improving picture for 90% LTV deals is down to lenders now offering tracker deals at higher LTVs.

It says that last November only fixed-rate deals were available to customers with small deposits.

Lenders offering 90% LTV tracker deals include Nationwide, Skipton Building Society, HSBC, Santander, Cheltenham & Gloucester and Saffron Building Society.

The only fixed rate deal to make the top 10 best buys on total cost comes from HSBC with a two-year fixed rate at 5.99%.

Jim Barrowman, national accounts director at Evaluate Technologies, says: “It is a genuine sign of confidence that lenders are now willing to lend at 90% LTVs and also that they are cutting rates for borrowers.

“Clearly the deals on offer at 60% LTVs are still substantially more competitive reflecting ongoing concerns about the housing market going into reverse and pressure on lenders to hold more capital in reserve for higher LTVs.

“However the revival at 90% LTV is to be welcomed and shows that gradually lenders are getting the message that if borrowers with smaller deposits are creditworthy enough to qualify for a loan they should not have to pay too much of a premium.”