90% LTV mortgage costs plummet


Most of the 90% loan to value mortgages currently available have seen their costs plummet over the last three months, according to one analysis.

The research from Mortgage Brain reveals that the cost of 90% LTV two-year tracker mortgage is now 4% less than it was in October 2015.

A two-year fixed 90% LTV mortgage has also fallen by the same amount and is 11% cheaper than a year ago.

A 4% drop in costs for a two year fixed mortgage means borrowers potentially save £324 on a £150,000 mortgage every three months – or £990 per year.

However, the firm also reveals that bigger savings are to be had with those who take out a 60% LTV mortgage which is now costing 7% less than it did in October 2015.

Mortgage Brain’s chief executive, Mark Lofthouse, said: “The reduction in cost will be welcome news for those with small deposits and it’s going to be interesting to see how the market plays out over the coming months.”

New self-cert mortgage lender

Another development in the mortgage lending market is the reappearance of a new self-cert mortgage lender who says it cannot meet demand.

Selfcert.co.uk says that when it launched it had more than 4,000 potential borrowers register their interest within two days.

Self-cert mortgages have been banned by the city regulator, the Financial Conduct Authority, and they were aimed at self-employed workers who could not prove their income to potential lenders.

There are also controversial since many borrowers inflated their incomes to obtain bigger mortgages but were caught out when the financial crash began in 2008.

Bridging loans in 2015 hit the £432 million target

Meanwhile, data reveals that bridging loans in the UK worth £432million were forwarded to clients in 2015.

The figure has been revealed by MTF who say that the total value of bridging loans made in 2016 will probably surpass that figure.

The popularity of bridging loans is growing as clients turn to the alternative form of funding to fill liquidity shortfalls.

Most of the loans, 80% of them, were first charge loans and most of the bridging finance completed last year was unregulated.

Popular reason for taking out a bridging loan

The most popular reason for taking out a bridging loan was to cover a mortgage delay with refurbishment being the next most popular reason for a bridging loan.

MTF director Joshua Elash said: “The figures show strong demand for bridging loans and interest rates were under downward pressure as the bridging sector is highly competitive.

“The bridging loans average term suggest that financing is more affordable and financially viable over a longer period of time.”