Average remortgaging customers have low LTVs, says mform.co.uk
Borrowers remortgaging this year can still access competitive deals despite mortgage panic in the wake of the credit crunch, online mortgage company mform.co.uk says.
The rate gap for customers with 90 per cent loans-to-value compared to borrowers with 50 per cent loans-to-value is just 0.19 per cent on the best two-year deals and 0.04 per cent on the best five-year deals*.
Average rates on two-year deals with a 50 per cent loan-to-value is 5.2 per cent compared with 5.39 per cent for a 90 per cent loan-to-value and on five-year deals the rates are 5.59 per cent and 5.63 per cent respectively.
And mform.co.uk analysis shows average loans-to-value for borrowers buying in the past three years range from around 58 per cent to 68 per cent** enabling customers who are remortgaging this year in a stronger position than feared. Customers remortgaging through mform.co.uk have average loans-to-value of 52 per cent.
Francis Ghiloni, mform.co.uk’s Marketing and Business Development Director, said: “Lenders have a significant part to play in calming the current situation by ensuring that they make mortgage funds available at a sensible price to good quality customers. Lenders have to shoulder the blame for some of the current situation.
“Mortgage customers are undoubtedly facing challenging times but they are not as bleak as is being painted. People coming off two, three and five-year fixed rate deals this will face higher monthly payments.
“However they will have benefited from house price increases and that will have enabled them to build equity and to substantially improve their loan-to-value.
“Panic about the UK heading for a worse house price crash than the US is unhelpful and speculative. Worse still the doom-mongers’ predictions could become a self-fulfilling prophecy. If borrowers become scared that prices will fall they will be less willing to invest and the fall will happen anyway.”
Analysis by mform.co.uk shows average mortgage advances in 2005, 2006 and 2007 were £114,078, £126,012 and £134,801 respectively. Given average house prices are now around £196,000 customers borrowing in those years will now have lower loans-to-value.
The best deals for customers with loans-to-value of 50 per cent come from lenders such as Marsden, Principality, First Direct, Stroud & Swindon, Cambridge and West Bromwich.
And for people with 90 per cent loans-to-value the most competitive lenders currently include Principality, HSBC, First Active, Market Harborough and Monmouthshire.
mform.co.uk offers a unique free service linking mortgage customers directly to the application systems of lenders. It is the only website which allows borrowers to search the whole market for the best products ranked on true cost and to apply directly to lenders.
The service is completely independent and is not influenced by commercial deals or advertisements. There are no distracting sponsored links and borrowers can also research mortgage product features and lenders’ service levels.
mform.co.uk works with lenders by enabling them to link with informed mortgage customers and by reducing lenders’ costs allows them to pass on savings to customers.
The service, which is free and easy to use, can be found at www.mform.co.uk.
Notes:
* mform.co.uk’s own analysis March 20th 2008
** mform.co.uk analysis of CML data
For more information contact:
mform.co.uk: Francis Ghiloni/Gordon Swan 0131 556 4845
Citigate Dewe Rogerson: Kevan Reilly/Jonathan Henderson on 0207 638 9571
About mform.co.uk
mform.co.uk enables people to simplify the process of choosing a mortgage by identifying the best ones for them based on a range of criteria, including cost and product features such as the ability to make over-payments.
The free service enables consumers to source personalised all-round best buys rather than deals based on headline interest rates or led by sponsorship deals and advertisements. . It provides information on the standard of service of lenders’ application processes and there are no sponsored links promoting mortgage products.
Jonathan Henderson
Citigate Dewe Rogerson
3 London Wall Buildings
London Wall
London EC2M 5SY
Switchboard: 0207 638 9571
Direct Line: 0207 282 1057
Direct Fax: 0207 282 1042
Email jonathan.henderson@citigatedr.co.uk
For more information see: www.citigatedewerogerson.com
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