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Northern Rock to launch 90% LTV mortgage range

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by Kay Mitchell
Northern Rock to launch 90% LTV mortgage range

Crisis-torn lender, Northern Rock, is understood to be launching a series of mortgage products which require just a 10% deposit (90% loan-to-value).

The announcement, revealed by the Financial Times, comes as mortgage lending continues to remain subdued as first-time buyers, in particular, struggle to obtain a mortgage unless they have a substantial deposit.

Since the credit crunch more than three years ago, lending criteria has tightened and homebuyers have struggled to get a foot on the property ladder, unless they have a deposit of at least 25%.

However, nationalised Northern Rock is said to be offering the high loan-to-value mortgage range as early as today, according to sources familiar with the matter.

While other major lenders are gradually offering higher loan to value mortgages, very few are offering 90% of a property’s value.

During the property boom, Northern Rock offered mortgages of 125% of the value of a property – however, this was set to be its downfall.

Northern Rock collapsed in the autumn of 2007 when savers staged a nationwide run on the bank.

This signalled the onset of the banking crisis and the Rock was subsequently nationalised in February 2008.

According to analysts, the bank could be privatised by the end of the year.

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News posted: February 28, 2011

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