- A third of mortgage searches are for products with a high LTV
- Only 25 per cent of mortgages available with LTV higher than 80 per cent
However, in the current market of over 2,200 mortgages, only a quarter of products available have an LTV over 80 per cent, and just four per cent of products are available to those borrowers with a 10 per cent deposit.
Not only are there a small number of these products available but the value of the deals is seriously lacking. Out of the thirty top discounted, fixed rate and tracker deals currently on offer, only one, from the Royal Bank of Scotland, is available to those with a 20 per cent or less deposit.
As a result borrowers looking to fix their mortgage now will pay an average 1.41 per cent more for a fixed rate deal on an 80-90 per cent LTV mortgage compared to a 60 per cent LTV mortgage. Borrowers looking for similar deals two-years ago would have paid an average 0.05 per cent less for an 80-90 per cent LTV mortgage compared to a 60 per cent LTV mortgage.**
Anyone borrowing £100,000 on a two-year fixed rate mortgage with an LTV of 80 per cent would currently pay £98.51 more per month on the current best deal compared to a borrower with a 60 per cent LTV - this equates to £2,364.24 over two years.
Hannah-Mercedes Skenfield, mortgage spokesperson at moneysupermarket.com, said; "When we compare the top products currently on offer with what consumers are looking for, we can see that there is some real disparity between the deals they need and what is available. The best deals are aimed at borrowers who have a sizeable deposit or equity in their homes, but in reality, these products are limited to just a third of the consumers who are looking for a mortgage. Two years ago, the better deals were for borrowers who wanted to borrow over 80 per cent LTV but as a result of the credit crunch we have really seen this market change.
"Lenders need to take a more balanced view when offering products and place as much importance on an applicant's ability to meet repayments as they do on deposit size. An increased focus on affordability over equity would mean lenders offering more competitive deals with a higher LTV to those who clearly demonstrate they can and will fulfill the mortgage requirements.
"For those looking to buy a home, but without a significant deposit, caution must be urged. Some of the variable rates currently on offer at a higher LTV are a long way above the Base Rate, meaning that when rates rise, repayments could sky rocket."
|
Product
Type |
2009 Average Rate |
Difference |
2007 Average Rate |
Difference |
|
Discount |
|
|
|
|
|
60% average rate |
4.13% |
0.01% |
6.81% |
0.77% |
|
80%-90% average rate |
4.14% |
7.58% |
|
Tracker |
|
|
|
|
|
60% average rate |
3.72% |
0.97% |
7.68% |
-0.65% |
|
80%-90% average rate |
4.69% |
7.03% |
|
Fixed |
|
|
|
|
|
60% average rate |
5.14% |
1.41% |
7.44% |
-0.05 |
|
80%-90% average rate |
6.55% |
7.39% |
**Source: moneysupermarket.com 07/10/2009
Mortgages
Two-year Fixed
|
Lender |
Pay Rate |
Period |
Max LTV |
Arr/Bkg Fee |
ERC |
Monthly Payment
£100,000 over 25 years |
Montly Payment
£200,000 over 25 years |
|
Lloyds TSB |
2.99% |
31-Jan-12 |
60% |
2.5% + £99 |
31-Jan-12 |
£478.03 |
£956.07 |
|
ING Direct |
3.84% |
31-Dec-11 |
75% |
£595 |
31-Dec-11 |
£524.45 |
£1,048.90 |
|
The Loughborough BS |
4.75% |
2 Years |
80% |
£475 |
2 Years |
£576.54 |
£1,153.09 |
|
HSBC |
5.99% |
30-Nov-11 |
90% |
£599 |
30-Nov-11 |
£651.27 |
£1,302.54 |
No products available at 95% LTV
Sourced by www.moneysupermarket.com 09.10.2009
Trackers
|
Lender |
Pay Rate |
Period |
Max LTV |
Arr/Bkg Fee |
ERC |
Monthly Payment
£100,000 over 25 years |
Montly Payment
£200,000 over 25 years |
|
HSBC |
2.74% |
Term |
60% |
£999 |
None |
£464.81 |
£929.62 |
|
ING Direct |
2.79% |
31-Dec-11 |
75% |
£795 |
31-Dec-11 |
£467.44 |
£934.87 |
|
NatWest/RBS |
2.99% |
31-Oct-11 |
80% |
£799 |
31-Oct-11 |
£478.03 |
£956.07 |
|
HSBC |
4.59% |
Term |
90% |
£999 |
None |
£567.21 |
£1,134.42 |
No products available at 95% LTV
Sourced by www.moneysupermarket.com 09.10.2009
- Ends -
Notes to Editors
*Figures based on September mortgage searches made through moneysupermarket.com
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