Hope for borrowers in negative equity with new 120% remortgage deal

Hope for borrowers in negative equity with new 120% remortgage deal




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Normally homeowners in negative equity coming to the end of their existing deal have very little wiggle room.

However, HBOS – now part of Lloyds Banking Group – has come to the rescue by offering a new deal to existing customers with loans bigger than the current value of the property.

Instead of reverting to the lender’s standard variable rate when their current deal draws to a close, customers will be offered the rates on 95% loans even if they need to borrow more than the property value – which, in some cases, can be up to 120% of the value.

Brokers have welcomed this move, saying that HBOS is the only major lender offering this option to borrowers facing negative equity, but added that the deal is unlikely to receive much publicity.

Melanie Bien from Savills Private Finance commented that HBOS was doing “the decent thing” for customers facing the nightmare of negative equity, adding: “Rates are likely to rise quickly next year, and those who can't remortgage elsewhere will find they are stuck on a spiralling rate. By giving existing customers access to a fixed rate normally available only to those borrowing at 95% LTV, HBOS is putting borrowers first.”

 

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