The mortgage insurer anticipates greater competition in the high loan-to-value lending market as a result of the government’s Help to Buy scheme.
Genworth Mortgage Insurance Europe commercial vice-president Simon Crone said: “The government’s Help to Buy scheme has created an expectation from consumers that all lenders will be offering more high LTV lending. It will be critical this lending is prudent and protected, as the high LTV lending environment becomes more competitive, and as house prices potentially rise.”
He told Mortgage Solutions he expected business to increase in the wake of the Help to Buy mortgage guarantee scheme.
Genworth’s existing clients appeared happy with private mortgage insurance and other lenders were discussing the option, he added.
He said: “Smaller building societies will look at the Help to Buy model, clearly, but from the conversations we have had with them they like the flexibility our approach gives them.”
According to the Prudential Regulation Authority, the capital relief provided to loans protected under the Help to Buy guarantee will apply to any mortgage insurance schemes with similar contractual features.
Genworth believes it will be able to price insurance competitively compared to the government guarantee. It aims to differentiate its products from the Help to Buy guarantee by offering additional features, such as premium options, a higher lending cap, individual underwriting and administration support.
