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High LTV mortgage numbers on the rise

High LTV mortgage numbers on the rise

Category: Mortgages

Updated: 17/04/2012
First Published: 17/04/2012

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 It is now over 6 months old so the content may be out of date.

The number of mortgage products offering maximum loan-to-values (LTV) of 95% has more than doubled over the last 12 months, Moneyfacts.co.uk research has found.

A year ago, there were 27 mortgage products available to buyers with a 5% deposit; today there are 61.

It marks a notable turnaround and compares even more favourably than two years ago, when there were a mere 13 products at 95% LTV.

Deals with a maximum LTV of 90% have also increased to 316 today compared to 228 this time last year, an increase of 43%.

Two years ago, there were 140 mortgages available for buyers looking for a 90% LTV mortgage.

The pricing of high LTV products has also fallen; one year ago, the average rate of a two year fixed rate mortgage at 95% LTV was 6.49%. However, this has fallen by almost a whole percentage point during the period, down to 5.52%.

The cost of 90% mortgages has also fallen in that time, from an average of 6.05% to 5.45%.

"Over the past couple of years we have seen the high LTV mortgage market stage something of a comeback, mainly due to high demand from borrowers with limited deposits," said Louise Holmes, spokesperson for Moneyfacts.co.uk.

"The first-time buyer market is often considered to be the life-blood of the housing market and mortgage lenders recognise this.

"Risk is still a major factor, however, and the majority of mortgages with high LTVs require the financial backing from a third party, such as a guarantor, as well as strict credit checks and lending criteria.

"These latest figures will be good news and a welcome relief to many borrowers who have struggled to find suitable mortgage deals within their financial capabilities."

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