Comeback for high loan to value deals as NatWest opens up 90% mortgages

NatWest is opening up its range of 90% loan to value deals to all customers in as sign that higher loan to value deals are making a comeback.

A two-year fixed rate at 5.99% with no product fee is now available to all customers and not just those with a NatWest current account.

Borrowers will also no longer need an account to access a five-year fixed rate mortgage at 6.29%.

It is also launching some more niche products such as two shared equity purchase deals for two and three year fixes.

The two-year fixed rate is available at 3.15% with a 25% deposit or less with no fee and the five-year fixed is 4.29% with no fee for the same deposit.

Three-year fixed rates of 2.55% and 2.8% both with a minimum of 40% deposit, are also being made available to everyone and not just current account holders but they do come with a £995 fee.

The moves by NatWest show there is an appetite for lenders to offer more mortgages and lend more money to a wider audience.

The current account restrictions showed the limited nature of NatWest's mortgage offering for those with low deposits.

While 5.99% may seem an expensive rate in these low interest rate times, it is still a relatively inexpensive and a sign of cheap mortgages UK.

Lenders are not just offering cheap rates for wealthy borrowers with high deposits but are increasingly looking to help first-time buyers or first-time movers.

A return of high loan to values?

The boom years have been and gone and most are glad to see the back or crazy deals such as Northern Rock's 125% Together mortgage.

But the demise of high loan to value deal of 90% or 95% has hit first-time buyers hard along with a boom in house prices lifting the cost of deposit to new heights.

After years of low mortgage lending and adverse risks there are tentative signs that lenders are acting to help people struggling to buy or move and get the market moving again.

Barclays has launched its family springboard deal which allow family members to use their savings to contribute towards a deposit.

Once the home buyer has paid off enough of their loan the family member can take their savings away again.

It is a variation on the parental guarantor mortgage that allowed parents to take the risk of stumping up the cash while their children could buy a home.

There have also been similar offerings from niche lenders such as Aldermore, which offered a 100% deal on a similar basis where the savings were held as a guarantee of the deposit.

Perhaps the biggest innovation is the Governments' mortgage indemnity guarantee scheme, which will see borrowers able to buy homes with just 5% deposit.

The Government will lend an interest-free loan of 20% of the property value for five years and the borrower will add between 5% and 15% to make the purchase.

It is avaialble on all homes up to £600,000 for anyone who wants to buy or move but targeted at first-time buyers and first-time movers.

All these products and plans show an increase in the supply of high loan to value mortgage deals that should brighten the hopes of prospective home buyers.

What to do next?

Buying a home is likely to be the biggest outlay of your entire life when you borrow hundreds of thousands of pounds and make it your biggest monthly payment for decades.

A decision of such magnitude needs expert advice to make sure you are on the right deal at the right price and that you've scoured the market.

Speaking to a qualified independent mortgage broker who has relationships with all lenders, large and small, and is a professional in the market inside out is the best bet.

There are more higher loan to value deals making their way into the market so it is time for first-time buyers and those who need them to start using them.