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More than 1,000 high LTV mortgages pulled from market in six months – Moneyfacts

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  • 07/09/2020
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Mortgage deals at 90, 95 and 100 per cent loan to value (LTV) now number fewer than 100, after 1,108 low deposit products were withdrawn in the last six months, Moneyfacts has shown.

 

Only 79 mortgages are now on offer to borrowers with smaller deposits, compared to 1,184 deals which were available before the pandemic hit the property market in March. 

The number is down from 98 high LTV products last month and compared to September last year, it’s a reduction from 1,172 deals. 

Additionally, a 16-year high in house price growth, which means larger deposits are needed to get onto the property ladder, has heaped pressure on those who meet minimum thresholds because suitable mortgages are now more expensive.

The average rate for a two-year fixed mortgage at 90 per cent LTV mortgage is now 3.54 per cent, up from 2.64 per cent last September. 

For a two-year fixed at 95 per cent LTV, the average rate has gone up by 1.25 per cent to 4.48 per cent. 

A five-year fixed 90 per cent LTV mortgage has an average rate of 3.76 per cent, while a five-year fixed 95 per cent LTV deal is 4.02 per cent. 

Compared to September last year, these are rises of 0.81 per cent and 0.38 per cent respectively. 

Rachel Springall, spokesperson at Moneyfacts.co.uk, said: “As we have seen over the past six months, lenders have pulled many higher LTV deals, with some institutions leaving these sectors entirely, largely because of the high level of demand they are experiencing due to the coronavirus pandemic.  

Until matters settle, there is no clear sign of when these deals will return to the market, and with 1,108 fewer deals available than six months ago at 90 per cent LTV and above, it is clear to see how much choice has reduced for potential first-time buyers. 

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