3
Nov
Lenders ease mortgage rationing
Lenders have been making it slightly easier for borrowers to
take out a mortgage, according to the financial information service
Moneyfacts.
The number of mortgages requiring a minimum 15% deposit has
risen from 189 in the past month to 226, the highest number for
more than a year.
At the same time the number of mortgages requiring a 20%
down-payment has fallen, from 136 to 117.
However 66% of mortgages still need at least a 25% deposit.
Darren Cook of Moneyfacts said the easing of mortgage rationing
was particularly good news for first-time buyers.
"It is encouraging to see that maximum 85% loan to value, or 15%
deposit, requirements have increased in numbers this month," said
Darren Cook of Moneyfacts.
"[This] might be an indication that some mortgage providers have
kept an eye on the housing prices, regained some confidence and
realigned their outlook towards risk," he added.
Ray Boulger at mortgage brokers John Charcol said the change was
a reflection of increased competition between lenders.
"Northern Rock has come back into the market in the past three
weeks with some increasingly aggressive pricing," he said.
"They have increased the competition for lower loan-to-value
(LTV) deals, so other lenders have been pushed towards lending more
at higher LTVs," he added.
The average first-time buyer still needs to put down a 25%
deposit according to recent figures from the Council of Mortgage
lenders.
But with house prices rising in the past few months, lenders
have lost some of their fear of losing ever larger sums of their
money if their borrowers default.
source: bbc.co.uk/news - Tuesday 3rd November 2009