Recent research by Moneyfacts has shown the average loan to value has fallen from 91 per cent in August 2007 to 74 per cent in early August 2009.
Although borrowers with small deposits will be dismayed by these figures, there has been an increase in the availability of low loan to value products. Here is a snapshot of the best deals currently available, across most loan to value tiers.
Lloyds TSB – 3 Year 60 per cent Fixed
This deal from Lloyds TSB, part of its Easy Step range of products, has tiered rates of 2.49 per cent to 28.2.2010, then 5.49 per cent to 31.10.2012. After this period the rate reverts to a standard variable rate of 2.50 per cent. The product is available for house purchases only, not remortgages. The maximum loan to value is 60 per cent with borrowing ranging from £5,000 to £350,000. A fee of £995 applies with an additional £99 booking fee. The deal offers flexible features such as overpayments, underpayments and payment holidays.
Lloyds TSB – 3 Year 75 per cent Fixed
Another deal from Lloyds TSB's Easy Step product range, this time offering tiered rates of 2.59 per cent to 28.2.2010, then 5.59 per cent to 31.10.2012. The rate will then revert to a standard variable rate of 2.50 per cent. The product is available for house purchases only, not remortgages. The maximum loan to value is 60 per cent with borrowing ranging from £5,000 to £350,000. Applicants must pay a fee of £995 plus an additional £99 booking fee. The deal offers flexible features such as overpayments, underpayments and payment holidays.
Chorley & District Building Society – 1 Year 90 per cent Fixed
Although this is a 1 year fixed deal, the rate of 4.99 per cent should appeal to those with a small deposit looking for a short term initial rate. Maximum loan to value is 90 per cent. Customers will need to pay a fee of 0.75 per cent of the mortgage advance amount. The mortgage is available to first time buyers, home movers and remortgage customers. Like most higher loan to value deals, it has a restricted lending area, in this case to customers in the North West of England. There is the option to make overpayments of up to 10 per cent of the outstanding balance.
HSBC – Variable for term 60 per cent
This deal offers a variable rate of 2.74 per cent, with an underlying rate of base rate plus 2.24 per cent, to first time buyers, home movers and remortgage customers. A fee of £999 applies and there is the option to make overpayments. Remortgage customers in England will be pleased to see this deal includes an incentive of free legal fees, while in Wales borrowers will receive help towards their legal fees of up to £400.
Woolwich – Variable for term 75 per cent
This product offers a rate of 2.97 per cent, with an underlying rate of lenders bank base rate plus 2.47 per cent. A plethora of incentives will no doubt appeal to borrowers. Remortgages customers with homes valued up to £2m will receive free valuation and admin fees, and the option of either a £200 rebate or free legal fees. There is also a host of flexible features, such as underpayments, overpayments of up to 10 per cent and payment holidays. Despite these appealing features, a large fee of £1,349 applies.
HSBC – Variable for term 90 per cent
HSBC offers a variable rate of 5.49 per cent for term, with an underlying rate of base rate plus 4.09 per cent. The deal is only available to first time buyers and home movers. No incentives are offered, although borrowers can make overpayments. A fee of £999 applies. Maximum borrowing amount is £400,000.
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.
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