100% LTVs confined to history?

Published: 01/06/2011

The Director General of the Council of Mortgage Lenders (CML), Michael Coogan, believes “the industry has seen the end of 100% LTV mortgages”¹.

Speaking at the Strategy Summit in Bedfordshire, he informed delegates that “lenders are not prepared to take the risk of LTVs higher than 95% as “they [the lenders] want to ensure first time buyers put down enough of a deposit to show they are taking the mortgage seriously”¹.

Despite such precautions as mortgage indemnity insurance and parental guarantees, the risk coupled with 100% LTVs remains.

Mike Fitzgerald, of Emba Group, disagrees though and believes that, while not expecting a 100% LTV revival in the next year or so, we shouldn’t write off an eventual comeback. The Sales and Marketing Director also warns lenders “if they don’t try to help first time buyers they are in danger of switching off younger Britons’ house-buying mentality.”¹

The market does appear to be moving closer to 100% LTV mortgages. Bovis Homes are now in discussions with lenders about offering a 95% LTV mortgage, less than a year after launching a 90% LTV deal with Woolwich².

¹Source: Mortgage Strategy (May 2011)
²Source: >Mortgage Strategy (May 2011)

Content correct at time of publication