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Sunday 27th of December 2009
November 20, 2009    

Coventry offers 125% mortgage for selected existing customers

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by Gill Montia

Coventry Building Society is supporting homemovers in negative equity by offering a mortgage of up to 125% loan-to-value (LTV) ratio.

The deal is available for existing customers with sound credit histories and perfect mortgage repayment records.

It involves transferring an existing mortgage to a property of equal or lower value without increasing the size of the loan, and is aimed at a relatively small group of Coventry borrowers who may need to relocate for work reasons or are in unsuitable accommodation.

The Society’s sales and marketing director, Colin Franklin, says: “We are offering a sensible level of support to people we have a relationship with who are facing real difficulty in moving home.”

Nationwide launched a similar offer in July, saying it would select borrowers very carefully.

The mutual allows negative equity from an old home to be carried over on the mortgage for a new property but increases the interest rate on this portion of the loan.

The 125% LTV mortgage was more freely available before the credit crisis, notably from Northern Rock, but has since become synonymous with irresponsible lending.

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Tags: 125% LTV, , loan to value ratio