It has been a tough time for homebuyers over recent years. Since the credit crunch, lenders have
tightened their criteria for mortgages meaning that borrowers have needed larger deposits and a
squeaky clean credit score.
However, over the last few days an increasing number of 90 per cent deals have been returning to
the mortgage market, reports The Independent.
90 per cent loan to value deals returning slowly
The Independent reports that deals allowing borrowers with a 10 per cent deposit have gradually
been creeping back into the market.
According to Moneyfacts there are 214 mortgage deals available at 90 per cent lending, compared
with just 94 in February 2009. However, whilst the numbers have more than doubled in two years,
the amount of 90 per cent deals is still way below the pre-credit crunch level of around 900.
Northern Rock amongst 90 per cent lenders
One of the lenders offering 90 per cent home loans is Northern Rock. The Independent reports that
its new range of 90 per cent LTV deals includes a two-year fixed rate at 5.99 per cent, a three-year
fixed rate at 6.49 per cent and a five-year fixed rate at 6.59 per cent.
The newspaper also highlights a 90 per cent deal with the Newcastle Building Society, fixed at 5.15
per cent for two years (£895 fee) and a 5.45 per cent two year fixed rate with Santander (£99 fee).
However, experts have warned that more deals won’t necessarily mean more first time buyers.
Michelle Slade from Moneyfacts said: “Borrower affordability remains the key factor in lending
decisions and lenders remain strict over which borrowers they will accept.”
David Hollingworth at broker London and Country agrees that affordability is the main issue and
explains that while new interest rates might be marginally more competitive than recent deals, ’this
isn’t a price war by any means’.
