The Reserve Bank of New Zealand has said that it would ease restrictions on loan to value
ratio (LVR) lending.
In particular, the minister welcomed the abolition of the [euro]220,000 loan to value
threshold limit for first-time buyers.
This variation is even more pronounced at a local level: in Burnley the average outstanding loan to value
among owner occupiers with a mortgage is 88%, while in Camden it is just 15%.
Carlton conducted a competitive process which resulted in a preferred equity component which allowed the borrower to achieve an approximate 90% loan to value
at a blended cost of under six percent.
Lovell's panel of building societies agree to increase their loan to values
in return for a "loan by loan" mortgage insurance paid for by Lovell which protects the high loan to value
proportion of the loan up to 95% at no extra cost to the purchaser.
While the average loan to value
has remained steady at 80%, one in five first-time buyers are now borrowing 90% or more.
ING Direct has a lifetime tracker at 3.24 per cent, up 0.75 per cent in the past three months, while Woolwich has one at bank rate plus 2.69 per cent, effectively 3.19 per cent, with a pounds 999 fee and a maximum loan to value
of 70 per cent.
However, Defaqto's analysis shows that average interest rates within individual loan to value
levels have fallen since November 2008 across nearly all the mortgage types reviewed.
In contrast, typical first-time buyers are being excluded from the market by stricter deposit requirements, lack of bank capital, and because they present a less attractive prospect to lenders due to the higher loan to value
loans required and their lack of track record in repaying a mortgage loan.
Summary: The bank has increased its loan to value
Loan to income and loan to value
ratios tend to rise in credit booms as lending standards become lax and prices inflate, Sir John told the London School of Economics.
They were mainly involved in buy-to-let lending and high loan to value
mortgages, of up to 130 per cent loan to value
at one point.