Defaqto highlights cheaper rates for sub-75% LTV mortgages

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Defaqto highlights cheaper rates for sub-75% LTV mortgages

Mon 19th Apr 2010

Borrowers who apply for mortgages for under 75 per cent loan to value (LTV) are getting the best interest rates, according to Defaqto, but this was not always the case.

David Black, banking specialist at the organisation, stated that there did not used to be much of a difference between the interest charge on a 75 per cent LTV mortgage and a 90 per cent LTV deal.

But he pointed out that over the past three years, the situation has changed and there is a much wider gap between the amount that people will end up paying for such loans.

In his view, it is first-time buyers who are suffering particularly badly, since they need to come up with a sizeable deposit to be able to get a decent interest rate.

Mr Black said: "The keenest rates are for those seeking a mortgage of less than 75 per cent LTV. Mortgages permitting 90 per cent LTV are significantly more expensive."

Last month, the firm recommended taking out an offset mortgage as a good way to reduce interest rates.

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