Gap between high and low LTV lending widening

Ryan Bembridge

April 24, 2017

The price gap between high and low loan-to-value mortgage lending is widening, research shows.

Currently typical 95% LTV mortgages cost 4.18% and the average 60% LTV rate is 1.81%, a difference of 2.37%.

In October 2016 that gap was 2.06% owing to cheaper 95% LTV mortgages at 3.97% and pricier 60% LTV rates at 1.91%.

Number of 90% LTV 2-year fixes at record high

And going back five years to April 2012 the gap was even smaller at 1.42%, with typical 95% LTV rates at 5.62% and 60% LTV mortgages at 4.20%.

Charlotte Nelson, finance expert at, said: “With improvements seen throughout the mortgage market of late, particularly for those with a 5% deposit, many would assume that the LTV-gap would have narrowed or even been bridged.

“However, it is disappointing to find that the reverse is true, with the gap bigger now than it was five years ago.

“Deals on the market today can seem worlds apart, particularly when you look at the lowest deals available on the market.

“For example, the lowest 2-year fixed rate on the market at 60% LTV is 0.99%, whereas the lowest at 95% stands at 3.29% – a whopping 2.30% difference.

“The 60% LTV sector has been lenders’ main target for some time, with providers actively seeking to be the lowest ever across the market, and it is this intense competition that has seen the gap grow despite average rates for higher LTVs also falling.”

She added: “Borrowers sitting close to the 90% LTV bracket could reduce their monthly repayments by saving that little bit extra to be able to move to the lower band.”

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