85% LTVs "excellent for mortgage market"

Date:Tuesday 7th April 2009
Author: Max Freedman

The introduction of 85 per cent loan-to-value (LTV) mortgages aimed at first-time buyers is "excellent" news for the home loan market, it has been claimed.

Peter O'Donovan, head of mortgages at Bestinvest, stated that the lack of such high value mortgages had been holding the recovery of the market back.

The expert made his comments following the announcement this month by Abbey that it is introducing a four-year fixed-rate product at 5.84 per cent.

Available exclusively for first-time buyers, the deal offers LTVs of up to 85 per cent and comes with a fee of £495.

Mr O'Donovan said: "It is good news that lenders are starting to move out to the higher LTVs - although the rates are still high in comparison to the better deals. It is excellent that they are starting to move in that direction."

He added that it is now more realistic for people seeking to get on to the property ladder to invest in a home.