Lenders Abbey and Alliance & Leicester have both removed their 125% mortgages. This leaves just Birmingham Midshires and the troubled Northern Rock with mortgages above the value of the property being bought. These mortgages are often used by people unable to meet the other costs of moving, such as stamp duty and legal fees.
Recently lenders have been removing the 100% mortgages on offer - before Christmas a third of lenders had these available, but that figure stands at around ten percent now.
This indicates a clear move of attempting to make borrowers more responsible for their borrowings and forcing buyers to be able to place a deposit on their new home.
Even after this month's rate cuts, there are fears that Northern Rock might have to increase it's lending rates and that this might cause other lenders to follow.
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