Woolwich cuts maximum LTV

Woolwich has announced it is to cut the maximum loan-to-value (LTV) ratio on its mortgage products to 90 per cent.

From Thursday May 8th the company, which operates as the mortgage arm of Barclays bank, will no longer offer three products presently on the market.

A lifetime tracker product, a five-year fixed mortgage and all loans on the organisations standard variable rate (SVR) products will be removed from the portfolio of products.

"Set against the background of a continuously changing market, we feel it is prudent from a customer perspective to limit the maximum loan to value (LTV) available to 90 per cent," the Woolwich said in a statement to customers.

"As a result, we will be withdrawing all products that are currently available for loans above 90 per cent with effect from Thursday, 8 May."

As the credit crunch continues to exact its toll on the market, a number of lenders have been forced into similar action.

Last week Nationwide cut its maximum LTV to 90 per cent, following the Halifax in adjusting its range of products.

Others taking a similar decision include Britannia, Co-operative bank, Cheltenham & Gloucester, Alliance & Leicester.

The changes have been promoted by a separation in the Bank of England's base rate of interest and the London Interbank Offered Rate (Libor), along with the threat of house price falls.

While the Bank's monetary policy committee (MPC) has cut rates three times since December, bringing the base rate down to five per cent, the rate at which high street companies lend to each other has remained stubbornly high.

Chris O'Toole