Average 90% LTV rates take a tumble - Mortgages - News - Moneyfacts


Average 90% LTV rates take a tumble

Average 90% LTV rates take a tumble

Category: Mortgages

Updated: 16/05/2012
First Published: 16/05/2012

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Average rates of 90% loan-to-value (LTV) mortgages have fallen steadily in the last five years, research from Moneyfacts.co.uk has found.

Currently, the average 90% LTV mortgage is priced at 5.44%, a significant fall from 5.98% at the same point last year.

In May 2010, the average rate of a mortgage requiring a 10% deposit was 6.38%.

At the peak of the mortgage crisis, the majority of lenders withdrew their high LTV mortgage products, leaving prospective homeowners with little hope of affording the large deposits required.

At its worst point in May 2009, there were just 76 mortgages available at 90% LTV.

However, that rose to 238 in May 2011, and currently stands at 299.

It is likely that the number will continue to rise as lenders launch new products for the NewBuy initiative.

"Demand for high LTV mortgages is, and always will, be high. Lenders have shown they recognise this by edging cautiously back into this area of the market with some competitive deals of late," said Louise Holmes, spokesperson for Moneyfacts.co.uk.

"However, strict underwriting and credit checks mean that approvals are at a premium.

"News of increased choice and lower rates in this sector of the mortgage market will be music to the ears of potential borrowers, whose voices finally appear to have been heard."

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Goodbye to the Help to Buy Guarantee

On 31 December, phase two of the Help to Buy initiative will be withdrawn from the market. It’s certainly done wonders for the high loan-to-value sector, so we thought we’d take a closer look at the significance of the scheme and the effect it’s had.

Remortgaging bounces back

Remortgaging has been enjoying a welcome boost in recent months, despite September’s slight dip, with many homeowners capitalising on record low mortgage rates to boost their finances.

Bank of Mum and Dad holds the (house) key

The Bank of Mum and Dad is an important source of finance for many young adults, and it seems that they still hold the key – in more ways than one.