Most Mortgage Borrowers Seeking 80% Plus Loans
Thu, 15 Oct 2009
MoneySupermarket.com has claimed that a third of mortgage search enquiries are for loans of 80% or above. However lenders are largely unwilling to lend at such equity levels, with most deals starting 75% or lower.
In the current market conditions, people taking mortgage borrowings at such loan to value ratio’s will be suffering under considerably higher interest rates as banks profile such lending as high risk.
This news comes after recent announcement from many banks that they have relaxed their lending policies, however the extent of the relaxation for most is only to 70% or 75%, still leaving this1/3 of enquirers out in the cold.
The mortgage spokeswoman for moneysupermarket.com, Hannah-Mercedes Skenfield, reportedly 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. 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 fulfil the mortgage requirements."