Leading mortgage lender Halifax has responded to the coronavirus crisis by withdrawing all mortgages above 60% loan to value (LTV).
Andrew Montlake, managing director of mortgage broker Coreco, said: “The Halifax’s decision to stop lending above 60% LTV reflects the wholesale recalibration of risk that is unfolding in the mortgage market.
“Not since the Credit Crunch have we seen lenders make such a flight to quality in limiting products to 60% LTV and below.
“In these unprecedented times, lenders, like a significant percentage of the world’s population, are going into lockdown.
“The decision of the Halifax is part logistics, of course, but to stop lending above 60% shows the seriousness with which it is taking Covid-19.
“With physical valuations on hold, for many lenders 60% LTV is the level at which they can engage their Automatic Valuation Models effectively from a risk perspective and process cases without too much human intervention.
“The issue will be that many remortgage customers may be forced to either stay with their existing lender or revert to more expensive standard variable rates until this crisis is over.
“The hope is that the mortgage market rebounds as fast as it is deteriorating once we come out the other side of Covid-19.”