At last we are seeing some green shoots for mortgage borrowing


Spring is here and Philip James is excited to see the first green shoots of healthy lending returning to the mortgage market after Northern Rock introduced a 90% LTV mortgage and within days rival banks and building societies were offering similar deals for buyers previously hampered with small deposits.

Last week it was good news for first-time-buyers too when Skipton Building Society introduced Britain’s only 95% LTV mortgage which doesn’t require a parental guarantor.

Northern Rock is an important focus both for mortgage lending and for a financial institute’s reaction to the spectre of rising interest rates. Although the state-controlled bank’s reason for offering a 90% mortgage isn’t purely altruistic (to return to private ownership it needs to raise more money) – but it’s a good sign that lenders are more open to offering customers better deals.

Northern Rock’s 90% two-year fixed rate currently sits at 5.99%, with a three-year fix at 6.49% and a five-year fix at 6.59%.

Cathy Neal from Which? Mortgage is cautiously optimistic about the bank’s recent changes in mortgage offering.

“Although these deals from Northern Rock may be more expensive than 90% deals currently available from other lenders, it’s good to see more choice for borrowers with only a 10% deposit.”

And Mark Liebert, financial advisor in Philip James Didsbury branch feels confident that rates will remain low for buyers with healthy deposits.

 “The Bank of England has indicated rates may have to increase in the near future based on the current rate of inflation, however with the last quarters’ GDP result showing a slowing of the UK economy and current problems in the Middle East they’re hedging their bets and last week held the rate at 0.5%. Interest rates remain at a very competitive late 2% and early 3% for those with sizeable deposits of 25% or more.

 It’s worth remembering that before the financial crisis hit Britain there were over 850 mortgages offering 90% LTV – now there are less than 200. But the green shoots are evident and the market is changing.

Over the next few months the market will offer buyers more and more options. So if you’re a first-time-buyer looking to get onto the property ladder, or an existing investor wanting to re-enter the market, Spring 2011 may finally be the time to get your skates on…



90% LTV

NatWest 4.59%, 2-year fixed, Existing customers only

Post Office 4.85%, 2-year tracker, Open to anyone

Santander 5.45%, 2-year fixed, Open to anyone

Northern Rock 5.99%, 2-year fixed, First-time-buyers

Northern Rock 6.49%, 3-year fixed, First-time-buyers


95% LTV

Ulster Bank 3.45%, 5-year fixed, First-time-buyers only

Lloyds TSB 4.89%, 3-year fixed, First-time-buyers/ existing customers only

Nationwide 5.49%, 2-year tracker, Existing customers only

Bank of Scotland 5.99%, 2-year fixed, Existing customers only



NatWest 5.99%, 5-year fixed, 85% (Existing customers only)

Halifax 5.79%, 3-year fixed, 85% LTV (Existing customers only)

First Trust 4.54%, 3-year fixed, 75% LTV (Existing customers only)

Bank of China 3.88%, Lifetime fixed, 75%LTV

Post Office 4.29%, 2-year fixed, 65% LTV



First Direct 1.99% / 2-year fixed / 65% LTV

ING Direct 2.19%,  2-year fixed, 60% LTV

Yorkshire 2.59%, 2-year tracker,  75% LTV

Post Office 2.95%,  2-year tracker, 80% LTV

Principality BS 4.29%, 2-year fixed, 85% LTV

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