HBOS to Offer 120% LTV Mortgages to Homeowners in Negative Equity

HBOS, a conglomerate of Halifax and the Bank of Scotland, which is now part of the Lloyds banking group, is to offer 120% fixed rate remortgage deals to homeowners in negative equity who are nearing the end of the fixed rate on their existing loan.

The limelight on mortgages is currently substantial, with the fact that new mortgage lending grew by 4pc in February still reverberating from a new source each day.

The original report from the British Bankers Association also noted a swift decline in remortgaging, this was echoed in a release by the Council for Mortgage Lenders today, which said remortgaging saw an astonishing monthly fall of 20% from 51,000 in January to 44,000 in February. It is likely the new HBOS product is aimed at turning this around, though it is not to be widely publicised (too late).

Currently, fixed rate mortgages are only available to buyers who have at least a 5% deposit, with the best deals going to people with larger deposits of up to 40% of the property's value.

HBOS is now offering the fixed rate usually offered to people with a 5% deposit, to people in negative equity, who are looking to remortgage because their fixed rate is coming to an end. It is thought to be the only bank to be currently doing so.

Earlier this month HSBC announced its intention to offer 90% mortgages to first time buyers as part of its expanding budget for new mortgage lending. The latest news from HBOS is undoubtedly an attempt at grabbing its share of the mortgage limelight.