High LTV mortgage rates 'still very off-putting'

Posted: 05 Feb 2010 09:37:12 GMT

Although an increasing number of high loan-to-value (LTV) mortgage products are coming onto the market, the rates are still "very off-putting", according to one expert.

Katie Tucker, technical manager at mortgageforce, says that first-time buyers will be in a much better position if they are able to save another five per cent deposit because 90 per cent LTV products do not offer competitive enough rates.

And she feels that it will be six months before the situation gets any better.

"There are so few [90 per cent LTVs] on the market and there is no need for the lenders to compete with each other," states Ms Tucker.

Her comments come in response to recent statistics from moneyfacts.co.uk, which reveal that the number of mortgage products available with a 90 per cent LTV has increased by 26.3 per cent in the last month.

Ms Tucker adds that while this shows that banks are beginning to ease their lending criteria, it is still not of any encouragement to first-time buyers because of the high rates that come alongside these products.

According to the Bank of England, there were 59,023 new mortgage approvals in December 2009.

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