Jumbo mortgages offer good rates

Published on Friday 15 August 2008 20:23

MOST borrowers continue to be squeezed out by risk-averse lenders, but deals for those looking for mortgages of half a million or more remain competitive despite the credit crunch.

More than a third of high street lenders still offer loans for 500,000 and above, according to Edinburgh mortgage company mform.co.uk, with more than 40 lenders offering over 188 five-year deals and in excess of 200 two-year deals for large mortgages.

But even wealthier borrowers should keep an eye on the true cost of loans, with fees creating additional costs of up to 30,000 on a loan of 1 million.

It said the best two-year discounted fixed rates on 500,000 loans start at around 5.49 per cent (compared with a top rate of 6.19 per cent for lenders with a loan-to-value of 90 per cent).

"The jumbo mortgage market is relatively cushioned from the credit crunch as borrowers are obviously wealthier and will have high levels of equity or big deposits," said Francis Ghiloni, marketing and business development director at mform.

"Lenders are still keen to attract their business as they are seen as safe bets and that is why so many deals are available."