Is it true that there are 90% LTV mortgages available? Will 100% LTV mortgage be back soon, too?
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Is this a sign of better times in the housing market?
mark123
1 year ago
Expert Financial Adviser Answer
Darren Smith
answered 1 year ago
Yes Natwest is offering 6.89% for 5 years but its not much to party about.
also remember as natwest is almost entirely state owned they have deep pockets but these type of rates are best avoided usually.
even by scraping a little more deposit and getting an 85% ltv loan will dramatically cut the above rate and would be far more attractive.
personally i think it highly unlikely that 100% will come back on standard schemes. there should always be a buyer contribution otherwise what financial incentive does the borrower have to make the mortgage work if they dont stand to lose anything?
one of the reasons the rate is so high is because 90% loans are still considered high risk
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also remember as natwest is almost entirely state owned they have deep pockets but these type of rates are best avoided usually.
even by scraping a little more deposit and getting an 85% ltv loan will dramatically cut the above rate and would be far more attractive.
personally i think it highly unlikely that 100% will come back on standard schemes. there should always be a buyer contribution otherwise what financial incentive does the borrower have to make the mortgage work if they dont stand to lose anything?
one of the reasons the rate is so high is because 90% loans are still considered high risk
Expert Financial Adviser Answer
Dr David Carter FPFS
answered 1 year ago
I am sure that Darren is absolutely right, here. In the general sense, the closer you are to the edge (such as the higher the percentage loan, or the more you wish to stretch your borrowing on your income) the fewer are the available products. With fewer products, and fewer lenders, the competition between them decreases and this, together with the greater perceived risk, pushes up the cost and pushes down the quality and flexibility.
The point about trying to obtain a bigger deposit - 15% or even 20% is a particularly important one, and well worth going for. And, no, I don't see the eventual return of stand-alone 100% loans, though the may become available where a guarantor can be found.
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The point about trying to obtain a bigger deposit - 15% or even 20% is a particularly important one, and well worth going for. And, no, I don't see the eventual return of stand-alone 100% loans, though the may become available where a guarantor can be found.
Expert Financial Adviser Answer
Paul Ross DipPFS CII(MP&ER)
answered 1 year ago
Looking on my research system this morning, there are quite a few, one starting at 4.59% for 90% loan to value, obviously subject to criteria. There are a few 95% LTV's as well, but these will be for existing mortgage holders.
I wouldn't hold your breath for any 100% deals coming out though. The government have tightened up the criteria as they don't want any Northern Rock situations happening again. 95% will be the best you'll be looking for, best bear in mind, the less you have with regards to a deposit, the more it will cost you ratewise as they will price in the "risk"
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I wouldn't hold your breath for any 100% deals coming out though. The government have tightened up the criteria as they don't want any Northern Rock situations happening again. 95% will be the best you'll be looking for, best bear in mind, the less you have with regards to a deposit, the more it will cost you ratewise as they will price in the "risk"
