New research from Moneyfacts shows that the UK’s mortgage lenders are becoming less scared of offering high loan-to-value (LTV) ratios. According to the price comparison website, the number of mortgages available to borrowers with a 10% deposit rose from 56 in August, to 114 in November.
However, availability remains severely contracted when compared to the 509 home loans at 90% LTV being marketed two years ago. By November 2008, only 133 remained, with the figure still shrinking as house prices continued to fall and the threat of negative equity loomed large.
Many would-be first-time buyers were effectively excluded from the housing market as a result, but in recent weeks some lenders have begun to relax their criteria. Royal Bank of Scotland’s mortgage lending arm recently launched a two-year tracker with an initial rate of 4.79%, a maximum LTV of 90%, and an arrangement fee of £999. In addition, Yorkshire Building Society subsidiary, Accord Mortgages, is now offering a two-year tracker at 4.49% at a maximum LTV of 85% and with a fee of £1,090.
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