Legal & General launches new mortgage as lending increases

People looking for a new long-term mortgage will be glad to hear that an exclusive lifetime tracker house purchase loan has been launched by Legal & General Mortgage Club.

The product, which is 3.39 per cent (initial rate 3.89 per cent) above the Bank of England base lending rate, is capped at 5.89 per cent until the end of January 2013 and will be provided by ITL Mortgages.
Available to a maximum loan-to-value (LTV) of 80 per cent and a ceiling loan size of £500,000, the new product is designed to give peace of mind in case of sharp bank base rate increases, according to Martyn Smith, head of mortgage products at Legal & General.

He explained: "There are no early repayment charges after two years, which gives extra flexibility and it is available up to a relatively high LTV.

Commenting on the product, Linda Will, sales & marketing director at ITL Mortgages said that the mortgage is being launched as part of efforts to increase lending for 2010.

She said: "This lifetime tracker deal has been designed to appeal to borrowers who require the benefit of a low pay rate combined with the security of a cap until January 2013."

Ms Will went on to express confidence in the fact that free valuation and legal fees accompanying the product will make it "a popular choice for people seeking a re-mortgage solution".

Meanwhile, it has been revealed that an increasing number of UK householders are beginning to take a Continental European attitude towards home ownership by choosing to rent.

According to a study conducted by professional advice website Unbiased.co.uk, more than 1.75 million homeowners would prefer to sell their home and instead rent compared to 12 months ago.

Nearly a third of (31 per cent) of those already renting their home believe this option gives them more freedom in light of the recent instability in the housing market.

However, one on ten renters (13 per cent) admitted that the property market crash has not eliminated their desire to buy a home and they are still hoping to take the plunge.

"While there are mixed messages as to whether house prices are now starting to rise again, it is clear that the property market crash has had a profound effect on the way people view their homes," commented Karen Barrett, chief executive of Unbiased.co.uk.

"For those renters who are still looking to get on the property ladder, especially first-time buyers, it is vital that they see a whole of market mortgage adviser to ensure they are getting the best possible advice."

Elsewhere, Katie Tucker of mortgageforce has predicted that 2010 will see lenders re-introduce 90 per cent LTV mortgages as competition for customers between increases.

She explained that first-time buyers will be subjected to less harsh conditions as lenders will be more flexible with their credit scoring and underwriting procedures.