The Newcastle Building Society recently announced that it is reducing its maximum loan-to-value (LTV) ratios to 90% and 95%. This means that borrowers will have to put down a larger deposit when taking out a mortgage with the Newcastle Building Society.
The Newcastle Building Society is one of the UK’s largest building societies and is known for offering competitive mortgage rates. However, the recent decision to reduce its maximum LTV ratios is likely to have an impact on potential borrowers.
An LTV ratio is the amount of a loan compared to the value of the property being purchased. For example, if a borrower wanted to purchase a property worth £100,000 and had a deposit of £10,000, they would have an LTV ratio of 90%.
The Newcastle Building Society has reduced its maximum LTV ratios from 95% to 90% and 95%. This means that borrowers will need to put down a larger deposit when taking out a mortgage with the Newcastle Building Society. This could make it more difficult for some borrowers to purchase a property as they may not have the funds available for a larger deposit.
The decision to reduce its maximum LTV ratios is likely to have been made in order to reduce the risk of borrowers defaulting on their mortgage payments. The Newcastle Building Society may also be trying to protect itself from potential losses in the event of a housing market crash.
The decision to reduce its maximum LTV ratios could also have an impact on the housing market. It is possible that fewer people will be able to purchase a property as they may not have the funds available for a larger deposit. This could lead to fewer people entering the housing market and could lead to a decrease in house prices.
Overall, the decision by the Newcastle Building Society to reduce its maximum LTV ratios is likely to have an impact on potential borrowers and the housing market. Borrowers will need to put down a larger deposit when taking out a mortgage with the Newcastle Building Society, which could make it more difficult for some people to purchase a property. The decision could also lead to fewer people entering the housing market, which could lead to a decrease in house prices.