February 26, 2010

Higher LTV Mortgages Double In Year

Mortgage lenders offering fixed-rate loans with a 90% loan to value or higher nearly doubled in the last 12 months – while numbers are still lower than they were a few years ago, more people may now have the chance to get hold of a mortgage.

New research from MoneyExpert.com shows that 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.

When it comes to the high LTV fixed-rate mortgage market, things are getting much better. The website says there has been a rise of 46% in terms of products available – the average LTV on a fixed-rate mortgage is now 76.8%, up from 75.7% 12 months ago.

But borrowers looking for a high LTV on a variable rate mortgage will have fewer options. The number of high LTV products of 90% or above 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.”

Of course, 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. But the important thing is that there are products available and there is hope for those who have spent the last two years languishing in mortgage purgatory.

SOURCE: Moneyexpert,com, 22/02/10

To keep up with the latest news and comments on the mortgage market please visit the Mortgage Broker Blog.

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