Nationwide has increased the deposit homebuyers must produce for their best available rate from just 10% of the property price to 25%. With average house prices in London in excess of £300,000, this will mean a £75,000 deposit is required to secure the best possible rate.
High loan to value mortgages are steadily disappearing, with 125% mortgages being pulled last week. This goes hand in hand with the credit crunch and the number of mortgage defaulters stteadily rising. Banks are reacting to this by making it more difficult to get high levels of credit.
Borrowers unable to rise the extra 15% deposit will still be able to borrow from the Nationwide, but only by paying a further 0.2% - almost effectively removing this months rate cut.
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