100% mortgages – reports of their demise etc…

A couple of weeks ago I arranged a ‘rate swap’ for a client with Halifax – the client was with Halifax already and as their house had fallen in value a remortgage to a new lender was out of the question, so we looked at products the Halifax hasd to offer their existing customers.

I called them up – I needed to know if they revalued the house (it would be handy if they didn’t) but, they do, they have a computer that does it. I asked if they’d be OK with the remortgage as the maximum loan to value was 95% and the lady on the phane said they were OK up to 120% loan to value.

This is good – if a client is unlucky enough to have ended up in negative equity, they don’t need that luck compunding by being unable to get a decent mortgage rate.

Today The Coventry Building Society joined in – their existing borrowers can rate swap up to 100% loan to value.

These are both ‘common sense’ decisions – not risk decisions.

The lenders in question already have the liability, they are reducing risk by making the mortgage more affordable.

It’s good to see ‘proper thinking’ again – the panic of the last 18 months needs to abate and I hope this is a sign…