Coventry offers 125% mortgages to existing customers

Coventry Building Society has thrown a lifeline to its existing mortgage customers who are in negative equity by offering loan-to-values of up to 125 per cent.

The measures will only apply to existing members and no additional borrowing will be allowed.

The lender said it would let its customers who qualify to move to a new property on their existing loan with up to a maximum loan-to-value of 125 per cent.

This follows a similar deal by Nationwide in July this year. The lender allowed existing customers in negative equity to move onto higher loan-to-value mortgages of up to 125 per cent.

Nationwide customers were offered a 95 per cent loan-to-value mortgage, with a rate of 6.73 per cent fixed for three years or 7.48 per cent fixed for five years.

Customers could then borrow up to an additional 30 per cent with increased rates of 7.23 per cent and 7.98 per cent.

Coventry said it wanted to help responsible borrowers whose need to move is restricted by having less equity.

It said the measures would only apply to members who have an “excellent credit history”.

Colin Franklin, sales and marketing director at Coventry, said: “As a mutual this is what our members expect of us. We are offering a sensible level of support to people who have a relationship with who are facing real difficulty in moving home.”

He added the deal might only affect a few of its members.

Ray Boulger, senior technical manager at John Charcol, said the move by Coventry was a good example of a lender responsibly looking after its existing customers.