Higher LTV home loans will 'drive down mortgage rates'

The number of financial institutions offering 90 per cent LTV mortgages is set to increase, those looking for cheap mortgages have been told.

Andy Pratt, chief operating officer at Alexander Hall, predicted that the increased number of 90 per cent LTV products on offer will drive up competition, which in turn will reduce mortgage rates and lead to greater affordability.

"There is a greater supply of higher loan-to-value mortgages … While you could say that it is just more of the same, they have all got slightly different criteria and slightly different views on risk, so it means that there is a greater choice for consumers," he explained to those looking for competitive mortgage rates.

Mr Pratt added that mortgage brokers are working harder to find the right solution for customers, to ensure they meet the criteria and are accepted in their application.

A report by e.surv seemed to confirm his forecast as mortgage approvals rose by 4.3 per cent in March, following a three-year high in the number of higher LTV home loans available.

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2011-04-11 15:10:11 © Moneyextra.com