Relaxed mortgage lending offers hope for borrowers

For the first time since the credit crunch began, one of the country's largest mortgage lenders is to relax its criteria, making its most attractive mortgage products available to thousands more borrowers across the UK as it raises is the minimum loan-to-value ratio on its best-buy mortgages from 60% to 70%.

The 15th of May will see Abbey reduce the minimum deposit required for the lender's most competitive fixed-rate mortgage deals by 10%. The news means that, after putting down a 30% deposit, homeowners will be able to secure a two-year 3.65% fixed-rate mortgage with a fee of £995, or a five-year fix at 4.69%.

This latest move will see the lender, which is owned by the Spanish banking giant, Santander, set itself apart from Nationwide, Lloyds TSB, HSBC and Halifax, which will continue to reserve some of their most attractive mortgage products for those homeowners who can put down a deposit of 40%.

"This is a positive move in a market that has seen nothing but a tightening of criteria for the last year," said James Carter of mortgage brokerage firm, Independent James.

"It is sign that Abbey has faith that monthly house price falls are easing and homeowners should expect that other lenders will have to follow suit."

Source: Times Online | Last updated: 13th May 2009

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