Budget & Saving

Lenders recovering - 90% mortgages return

The first major casualty of the global economic crash has recovered sufficiently to offer 90% loans to mortgage seekers.

Northern Rock, bailed out and part-nationalised by the taxpayer to the tune of billions of pounds, is offering three-year fixed deals for people who have just 10% of the total value of the property.

The return of the 90% mortgage is one indicator of a recovery and increased stability of the financial market. This type of mortgage is particularly useful to first time buyers, enabling them to get on the property ladder.

The bank states the move is to help struggling first-time buyers and people who did not have much equity in their property, though it is speculated that the decision is designed to increase profits at the group through higher-margin lending, ahead of a sale of the business.

The group's capacity to lend was restricted since its part-nationalisation but this has now been loosened, enabling it to expand its mortgage business.

Sam Jackson

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