Mortgage lending figures will struggle to improve

“If you only have a small amount of equity in your home you are going to move onto your lender’s standard variable rate (SVR) rather than pay over 6.00%.

“At a rate of 6.29% your monthly repayments on a £150,000 mortgage would be £993.

“If you are with Nationwide BS or Cheltenham & Gloucester your SVR is now 3.50%, which equates to £751 a month.

“It is going to take something pretty special to make a borrower pay £5,808 more over the two-year term.

“Borrowers with less than 25% equity are in the majority, but they are being penalised with deals costing 2% more than on offer for those with 40% equity.

“Until we start to see competitive deals at 85% and even 90% LTV, we are not going to see any real
improvements in the lending figures.

“Borrowers may want to borrow and lenders may start to lend again, but unless they lower rates on new deals we are going to continue with this stalemate position.

“The Government is asking banks to look at ways of lending responsibly. However, it seems that the banks are finding reasons not to lend at all.”

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