Mortgage borrowers are set to be hit with a fresh squeeze, as the credit crunch forces banks to cut back on discounted rates for many customers.
Brokers contacted by The Sunday Business Post warned that the credit crunch in the banking sector was resulting in banks tightening their criteria for offering discounts to customers with low loan-to-value (LTV) ratios. These measure the relationship between a loan and the value of the property against which it is secured.
This would, in turn, push up the rates available to borrowers with higher LTV ratios. Michael Dowling, the former president of the Independent Mortgage Advisers Federation, said banks were ‘‘hitting people twice’’, as they announced rate increases for new business while at the same time changing the LTV thresholds at which discounted loan rates would apply.
**Banks cut back on discounted mortgage rates **
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