Best Loans News

Over the course of the past twelve months, the home owner loan market has seen a dramatic increase in the number of loan products which are available to potential borrowers and particularly for those borrowers who require a high loan to value deal.

According to new research from Moneyfacts, there are now 384 separate loan deals available for a loan to value of up to 80 per cent, compared with just 153 similar deals back in December 2009. This shows an overall increase of 151 per cent.

Although there has been a significant increase in the number of loan products offering between 70 and 90 per cent loan to value, there has been a slight drop in the number of products offering only 60 per cent loan to value.

Despite this increase in choice of home owner loan deals, it still seems that many would be borrowers are still reluctant to commit to taking out a large loan in the current economic conditions and many are still struggling to raise the necessary deposit, or to be able to afford the monthly loan repayments, which have been laid down by lenders.

Although there is a wider choice of loan products which offer a high loan to value, many of these deals are still relatively expensive when compared against loan products which require a larger deposit and lenders standard variable rates.

Similarly, fixed rate loan deals tend to have a higher interest rate than the equivalent tracker rate loan, as lenders include a cushion for themselves in the event of interest rates increasing.

Michelle Slade of Moneyfacts said “A rise in bank base rate still appears elusive and borrowers are opting to make the best of low mortgage repayments while they can.”

“The best deals are being offered to borrowers with at least 25 per cent deposit as lenders vie to attract the more asset rich borrower.”