Menu Home

Moneyfacts comments on rising LTV levels

Small loanFinancial advice site Moneyfacts has issued a statement regarding the trend among some mortgage lender to increase the loan-to-value (LTV) rates on their mortgage offers, in response to the rising levels of debt in the USA.

The site notes that total secured lending in the USA now tops $1 trillion, with average household debt at $8,577, or $50,091 with mortgages included.

Rising house prices and lower affordability are leading to borrowers needing to take on larger loans, which some lenders have responded to by increasing their maximum LTVs, Moneyfacts claims.

“Income multiples have reached an all time high, increasing numbers of borrowers are opting for interest only mortgages and repayment terms in excess of 30 years are now commonplace,” said Scott Hanton, mortgage analyst at Moneyfacts.

“But most recently we have witnessed an increase in LTV limits, meaning that more mortgage products requiring a smaller deposit from the customer are now available.”…