Woolwich abandons 95% LTV
by Gill Montia
Woolwich has become the latest mortgage company to reduce its loan-to-value (LTV) ratio for new customers.
The lender, which forms part of the Barclays group, is withdrawing all products with LTVs exceeding 90% from Thursday 8 May.
These include a 5% LTV lifetime tracker plus five-year fixed-rate and standard variable rate loans.
The move, which follows last week’s decision by Nationwide to introduce a minimum 10% deposit for all but two of its mortgages, is in response to what the Woolwich describes as a continuously changing market.
Other leading lenders now requiring a minimum 10% deposit for new business include Co-op bank, Cheltenham & Gloucester, Alliance & Leicester and the Britannia.
Since the beginning of the year, there has been a growing trend for lenders to demand larger deposits.
Mortgages of up to 125% LTV have disappeared and 100% loans are now only available from niche lenders.
The most attractive deals in terms of interest rates can demand deposits of up to 25%.
The Post Office, Skipton building society, RBS and HSBC still provide loans that accept a 5% deposit but some mortgage experts are expecting the 10%, or even 15%, deposit to become the norm in the months ahead.
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