The loan to value gap - 08.01.2009

Author: Michael Aglony Posted on: 07 January 2009

I beg to differ. I have taken it upon myself to do a bit of research into how pricing differs depending on the amount of equity your property has in it.

On comparing a standard remortgage, a 85% deal will come in at 4.99% fixed rate for a couple of years with a £995 fee. 75% loan to value will get you a rate of 4.49% and 65% loan to value gets you 4.19% - all with similar fees.

Now I do appreciate that not many of us have 35% equity in our homes, however when you consider that for a extra 20% borrowing, you pay just 0.8% on your rate, I would argue that things aren’t so dire after all. Admittedly, once you go into the realms of 90%+, things do start to get less attractive, but really, is it all that bad?