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Halifax to penalise borrowers with deposits of less than 25%

Halifax has introduced a new Loan to Value banding system which will see borrowers with less than 25 per cent deposit charged 0.14 per cent more.

The lender will be introducing, from Monday, three LTV bands replacing its current two groupings. The first band will be for LTVs of 0 to 75 per cent, the second will consist of LTVs between 75 to 90 per cent, with the last at 90 to 95 per cent.

These changes will apply across Halifax, Bank of Scotland and Intelligent Finance.

A HBOS spokesman says that borrowers who give a deposit bigger than 25 per cent the value of the home will typically be charged 0.1 per cent less.

He says: “We will reward customers for their prudence.”

For those borrowers who can only afford to put a deposit of between 10-24.9 per cent, HBOS will charge them 0.14 per cent more.

HBOS claims that 70 per cent of its customers already put down deposits of more than 25 per cent.

It will also be launching a new First Time Buyer product range from Monday. This includes a 5-year fixed rate product available up to 90 per cent LTV at a rate of 5.69 per cent.

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