Northern Rock to Offer 90 Percent LTV Mortgages
Posted on:
28
Feb
2011
by Huw Thomas
Northern Rock is set to launch a 90 percent loan to value mortgage, marking a return to riskier lending for the nationalized bank.
Three years on from the financial crisis and Northern Rock’s bailout by the government, the move is seen as a way to boost revenue and make the company a more attractive prospect for private buyers.
Since the government’s takeover the bank’s highest loan to value rate has been 85 percent. This stands in stark contrast to the 125 percent LTV Together mortgage, which characterized Rock’s aggressive previous lending practices and led to many of the biggest failures of the financial crisis.
Northern Rock’s move echoes a growing trend, with HSBC and Santander among the lenders now offering mortgages on just a 10 percent deposit. According to figures from Moneyfacts.co.uk there are around 200 mortgages with 90 percent LTV currently on the market, roughly a quarter of what was available before the crisis.
According to reports, Northern Rock could launch the mortgages as early as today. The bank is likely to limit the amount of funds made available for the loans, with rates starting at or under six percent.
