Lenders relax criteria with 95% mortgages blooming

Written by Sam Jones on 20 September 2012.

Moneyfacts is reporting a boost in high LTV loans with five in the 95 percent mortgages LTV tier, all of which were fixed rate products.

It also reported there were 15 in the 90% LTV tier - nine fixed and six variable.and 36 new mortgage deals in the 85% LTV and above in August 2012, a complete reversal from the drop of 26 products in July.  In a breakdown of individual tiers, there were 16 more products in the 85% LTV tier - 11 fixed and five variable.

Moneyfacts says it suggests lenders are relaxing their attitudes to higher risk lending, perhaps in reaction to the Government's recently-launched Funding for Lending scheme, which aims to make £80 billion of cheap funding available to banks and building societies on condition that they lend more to small businesses and consumers in the hope that this will kick-start the economy.
However it appears that building societies are leading the way at offering products targeted at those with smaller deposits, with 10 of the 15 providers which launched 90% plus LTV products being building societies.'s finance expert Sylvia Waycott says: "Increasing LTVs will create a knock-on effect in the whole housing market. Not only will it aid the stagnation of the first-time buyer market, but also the second movers market because they need first-time buyers to sell to. Housing buying as we all know is a chain and every link is essential; strengthen one link and the whole chain benefits."

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