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London & Country Mortgages confirm that 125% Mortgages are Back

Top Quote Nationwide has hit the headlines with news that it can offer homebuyers a mortgage of as high as 125% of the property value. End Quote
  • (1888PressRelease) October 27, 2009 - This initially sounds like a return to the lending practices of the “pre-crunch years” and the now infamous Northern Rock Together mortgage. Whilst the Together 125% deal actually served some borrowers pretty well it has become synonymous with the carefree credit conditions of 2007.

    However when you look closely at the Nationwide proposition it is a world away from replicating the Northern Rock product. It is designed to help existing borrowers that need to move home but now find themselves in negative equity, as their property value has fallen to the extent that it is less than the outstanding mortgage.

    Nationwide allows all existing customers moving home to borrow as much as 95% of the property value albeit at higher interest rates. In this scenario the borrower still needs to put in at least a 5% deposit but they can also borrow an amount to cover the negative equity, although this is charged at an even higher rate.

    The reality is that this initiative will only have any relevance to a small niche of borrowers that really need to move, perhaps to relocate for a new job or to accommodate an expanding family. However it will at least provide an option to those that have a genuine need to move.

    Borrowers looking to find out how much their current property is worth can use http://www.lcplc.co.uk/calculators - London & Country Mortgages house price calculator. They can then calculate their loan to value ratio (LTV) by dividing the current balance of their mortgage by the current value of their home. If this is over 100% they will have negative equity.

    Notes to editors:
    London and Country Mortgages Ltd is the country’s leading whole of market no-fee mortgage broker and submitted over £4bn of mortgages to over 70 lenders in 2008.

    For more information visit our website http://www.lcplc.co.uk

    L&C is a Climate Neutral company and for the last seven years has invested in climate friendly projects and tree-planting to help offset its emissions and those of its customers.

    L&C has won numerous awards including:

    Best Mortgage IFA/Adviser of the Year – Money Marketing, 2004, 2005, 2006 and 2008
    Best Technology Adviser – Money Marketing 2007
    Best Mortgage Broker outside London – Mortgage Strategy, 2004 and 2005
    Best National Broker – Mortgage Introducer 2005, 2006 and 2007
    Best Overall Broker – Mortgage Introducer 2005
    Overall broker of the year – Pink Home Loans, 2006 and 2007
    Top 100 company in the Sunday Times Fast Track 100 for 2004 and 2005
    Business of the Year – The Bath Business Awards 2005
    Growth Strategy of the Year – National Business Awards (Wales and West) 2008
    Business Leader (Broker) – British Mortgage Awards - 2008
    Online Mortgage IFA of the Year – Financial Adviser - 2008

    Press Contacts:
    Richard Morea, Technical Manager
    Office: 01225 341312
    Mobile: 07970 885168

    David Hollingworth, Head of Communications
    Office: 01225 341211
    Mobile: 07710 634044

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