Watford, Hertfordshire (PressExposure) October 23, 2007 -- After the Northern Rock and credit turmoil in the financial markets, the lenders have tightened their loan conditions. Interest rates on secured loans and mortgages have been hiked, the maximum loan-to-value ratios have been cut and the terms and conditions have been made strict for the borrowers.
According to one price comparison website, the number of mortgage deals has gone down by 40 per cent in the last three months. The sub-prime home loan deals have been significantly reduced whereas the mainstream residential mortgage market has also suffered.
For those borrowers who are struggling with high interest rates, an Interest Only option can be a relief.
Melanie Bien, director at independent mortgage broker Savills Private Finance said: "There are fewer products available, which is making it harder to place business. Those with chequered credit histories and first-time buyers with little in the way of a deposit will struggle the most, but the mainstream market won't get away unscathed."