The mortgage market is showing signs of a rapid return to higher value lending with the number of providers offering fixed-rate loans with a 90 per cent LTV or higher nearly doubling in the last 12 months, research from finance website MoneyExpert.com showed.
Its analysis confirmed there are 147 fixed-rate products available for those wishing to borrow 90 per cent or more of the value of their property. This represents an 88 per cent increase on the 78 products available this time last year.
The fixed-rate mortgage market as a whole has increased by around 46 per cent in terms of products available, since February last year but these latest figures suggest a growing inclination towards higher LTV lending. The average LTV on a fixed-rate mortgage is now 76.8 per cent, up from 75.7 per cent 12 months ago.
Borrowers looking for a high LTV on a variable rate mortgage will have fewer options. The number of variable products available has tripled since this time last year, but the number of high LTV products with an LTV above 90 per cent has just risen modestly from 43 in 2009 to 51 now.
Pierre Williams, head of research, MoneyExpert.com, said: “For those looking to borrow a sizeable percentage of the value of their home this is clearly good news. Lenders have been risk averse in the past year and have shied away from high LTVs. Measured optimism over the housing market, though, seems to be encouraging higher value lending.
“It’ll be interesting to see how other providers react in the coming months. We’re some way off the flurry of 100 per cent deals of previous years and that is a good thing to some extent but it seems that door is opening up.”
First-time buyer products offering 90 per cent LTV s have increased from 75 12 months ago to 108 now. Moneyexpert.com said these offers, from the likes of Natwest, RBS, and Saffron Building Society, are currently only available as product transfers, effectively for customers coming to the end of a deal but unable to re-mortgage elsewhere, but added these just diodn't exist 12 months ago.
Borrowers on higher LTV products will face higher rates on the deal. The average fixed-rate mortgage product is currently at 5.4 per cent, well below the 6.3 per cent average for deals with an LTV of 90 per cent or higher. The same applies to a lesser extent on variable-rate products where the average rate is currently 3.9 per cent.
For variable products with an LTV of over 90 per cent the average rate is 4.8 per cent.
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