DUNFERMLINE Building Society last night pulled its range of mortgages available with loan to values (LTVs) above 100 per cent, writes Rosemary Gallagher.
The Scottish lender's move marks the end of the market for mortgages allowing people to borrow more than the value of their property.
Dunfermline has withdrawn its 105 per cent LTV graduate and 110 per cent LTV professional mortgages. It has also
stopped giving first-time buyers 100 per cent deals.
Simon Cocker, head of business development at Dunfermline, said: "As expected, with being only one of a few lenders in the 'high LTV' marketplace, we have received a large inflow of applications for 100 per cent-plus products over the last few weeks. This has meant we have achieved our current quota and therefore it is prudent to withdraw this range at present."
Melanie Bien, director of independent mortgage broker Savills Private Finance, said: "The end of 100 per cent-plus LTV mortgages comes as no surprise: it was only a matter of time. This sector of the market is deemed too risky when house-price growth is slowing."
And Edinburgh-based Standard Life Bank is to withdraw all its two-year tracker and fixed-rate mortgages from Thursday.
As well as pulling products, lender are also increasing interest rates.
Research published today by MoneyExpert.com, a comparison site, revealed that a typical home owner can now expect to pay an initial rate of 6.14 per cent on a long-term fixed-rate deal. This figure is up from an average interest rate of 5.89 per cent a year ago on fixed deals of ten years or more.
The full article contains 279 words and appears in The Scotsman newspaper.
