Britons with small deposits are paying substantially more for mortgages, it has been claimed.
According to the independent financial research company Defaqto, since the onset of the credit crunch, borrowers seeking a higher loan-to-value (LTV) mortgage have been forced to pay significantly more.
However, just three years ago there was negligible difference in the interest rates charged whether you had a ten per cent deposit or a 25 per cent deposit.
Indeed, David Black, banking specialist at Defaqto, explained that the "keenest rates" are for those seeking a mortgage of less than 75 per cent LTV, while mortgages permitting 90 per cent LTV are "significantly more expensive".
He added: "First-time buyers are particularly hard hit as they need a substantial deposit merely to get on the housing ladder and a significantly larger deposit to access the best rates."
Meanwhile, the Bank of England recently claimed that homeowners repaid a record amount on their mortgages in the first quarter of 2010.
According to the Bank, Britons repaid £8.1 billion on their mortgages in the first three months of the year.
High loan-to-value mortgage rates remain much higher
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High loan-to-value mortgage rates remain much higher
Tue, 20 Apr 2010
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