Mortgage House to offer 105% home loan
Article by Mozo
Non-bank lender Mortgage House has confirmed that from next month it will offer a home loan equivalent to 105 per cent of a property's value.
The company said the offer was aimed at helping first-home buyers cover costs associated with entering the property market and that it would only be available to borrowers with a good credit record.
As the Sunday Telegraph observed, such generous lending comes as other institutions also look to stimulate the housing market, with Westpac last week raising its loan-to-value-ratio (LVR) for new customers from 87 per cent to 92 per cent.
University of Western Sydney economics professor Steve Keen suggested the rises would offer borrowers more options when they come to compare home loans.
"Little changes in LVRs have a massive impact on what you can borrow. If you need a deposit of 13 per cent and have $50,000 saved up, that cash will enable you to spend $384,000 on a property," he told the newspaper.
"But if the bank will lend 92 per cent, your $50,000 will allow you to buy a property worth $625,000."
Mortgage House's 105 per cent offer comes after it last month launched a 99 per cent LVR home loan, which it claims has already proven to be highly popular.
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