LTV stands for loan-to-value ratio. In other words, it is the percentage of the cost of a property that a bank is prepared to lend you. For example, if a property costs £200,000 and a lender’s LTV is 75%, then they will lend you no more than £150,000.
Kensington’s new range of deals for first time buyers includes mortgages with high LTVs of up to 85%. Before, they would offer no more than 80%.
For example, the mortgage lender is offering a two-year fixed rate mortgage at 5.69% with the maximum 85% LTV. The fee for this loan is £699.
Kensington claims to make lending decisions based on each individual customer, not just their credit score, because first-time buyers may not have an extensive credit history from handling loans in the past.
It is good to see a lender remembering those at the first rung of the ladder. And the increased loan to value shows growing confidence in the market and an increased desire to lend – a move in the right direction.
Kensington is an intermediary only lender. Talk to us at Limetree if you would like to know more about their products.