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Higher-LTV mortgages pulled from sale

Higher-LTV mortgages pulled from sale
Shekina Tuahene
Written By:
Shekina Tuahene
Posted:
03/06/2024
Updated:
03/06/2024

Some higher-loan-to-value (LTV) mortgage products were pulled off the market last week despite the subdued market, data from a financial product analyst found.

The number of fixed mortgage deals at 95% LTV fell from 329 to 326 between 23 and 31 May, according to Moneyfacts. 

Over the same week, the number of options at 90% LTV dropped from 700 to 696. 

This included Hanley Economic Building Society withdrawing its two-year fix at 95% LTV and Principality Building Society pulling select two- and five-year fixes for first-time buyers at 95% LTV. 

Saffron Building Society also withdrew a five-year fix at 90% LTV, and Vernon Building Society discontinued some five-year fixes at both 90% and 95% LTV. 

More choice for low-deposit borrowers 

Despite this decline in high-LTV mortgages, there are more products available on the market than both at the start of this year and the same time last year. 

There were 251 deals at 95% LTV in January and 209 in June last year, while there were 640 products at 90% LTV in January and 539 in June 2023. 

The average rate for a two-year fix at 95% LTV was 6.18% as of 31 May, lower than the average of 6.2% the week earlier. For a five-year fix at the same tier, the average rate fell from 5.71% to 5.7% week-on-week. 

At 90% LTV, the average two-year fixed rate was 6.14%, down from 6.16% as of 23 May. The average five-year fixed rate also declined slightly from 5.6% to 5.59%. 

High-LTV withdrawals may ‘raise eyebrows’ 

Rachel Springall, finance expert at Moneyfactscompare.co.uk, said: “The fact that a few lenders are withdrawing some higher-loan-to-value products may raise eyebrows, but we are not seeing a mass exit. However, should more deals be withdrawn at higher loan to values, it may come as disappointing news to those who have a limited deposit, such as first-time buyers. The deals that have disappeared last week may well resurface, perhaps when repricing activity picks up in the coming weeks.

“Affordable housing is very much in short supply. There need to be significant changes to turn this around, but borrowers will have to wait and see what might be announced to address this issue after the general election. In the meantime, any borrower looking for a new deal would be wise to seek independent financial advice to find the best mortgage that suits their circumstances, such as one with a bundle of incentives providing the best overall value for money.” 

Related: Property sales rise in April, along with capital gains changes