Residential  

High value mortgages on the rise

High value mortgages on the rise
 Credit: Chris Ratcliffe/Bloomberg

The number of mortgages at 90 per cent LTV saw the largest monthly growth in availability in January, according to Moneyfacts.

Figures from the data provider showed the number of 90 per cent LTV products almost doubled to the highest recorded since June, from 88 last month to 160 at the start of January.

Eleanor Williams, finance expert at Moneyfacts, added that a fall in average rates indicated lender confidence could be returning.

She commented: “At the higher end of the LTV tiers, both the average two and five-year fixed rate deals for those looking to secure a mortgage at 90 per cent LTV saw the largest monthly reductions, dropping by 0.14 per cent and 0.13 per cent respectively this month.”

Mortgage market analysis: 90 per cent LTV

 Jan-20Mar-20Apr-20Jun-20Jul-20Dec-20Jan-21
Product count7517793261837088160
Average two-year fixed rate2.59%2.57%2.84%2.30%2.90%3.79%3.65%
Average five-year fixed rate2.92%2.91%3.24%2.57%3.16%3.92%3.79%

Lenders are continuing to return to the high LTV tier, as HSBC reintroduced mortgages at 90 per cent LTV yesterday (January 12) with fixed rate options with up to 35-year terms.

Rates include a two- and five-year fixed deal at 3.69 per cent and 3.84 per cent respectively, as well as a two-year tracker rate at 3.79 per cent, all with a £999 fee.

Michelle Andrews, head of buying a home at HSBC UK, said: “Home-ownership dreams may have seemed even further away for many first time buyers of late, but with more providers returning to 90 per cent LTV mortgages, they may be closer to becoming a reality, which is great news.”

Meanwhile, Leeds Building Society has also launched two 90 per cent LTV deals for residential purchase or remortgage.

A two-year fixed rate is available at 3.44 per cent, as well as a five-year fixed rate at 3.50 per cent.

Matt Bartle, director of products at Leeds Building Society, said: “We keep our products, rates and lending criteria under constant review to ensure we can continue to support customers who are not well-served by the wider market, informed by insight such as the feedback we seek and receive from our intermediary partners.”

Brokers have previously welcomed lenders reintroducing 90 per cent LTV products after a shortage during the pandemic.

Research from Knowledge Bank found that searches for maximum LTV became less common among brokers towards the end of last year, as more lenders reintroduced 90 per cent LTV products.

chloe.cheung@ft.com

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