{{Unreferenced, date=December 2014
A higher lending charge (HLC) is a charge made by mortgage lenders in the UK when the
loan-to-value ratio
The loan-to-value (LTV) ratio is a financial term used by lenders to express the ratio of a loan to the value of an asset purchased.
In Real estate, the term is commonly used by banks and building societies to represent the ratio of the first mo ...
of a mortgage is higher than they are prepared to accept at standard rates.
Typically, HLCs are applied to loans in excess of 90% of the property value although, until the 1990s, the limit was usually 75%.
A number of mortgage lenders do not charge HLCs. They avoid this by either restricting the availability of their mortgages to lower
loan-to-value
The loan-to-value (LTV) ratio is a financial term used by lenders to express the ratio of a loan to the value of an asset purchased.
In Real estate, the term is commonly used by banks and building societies to represent the ratio of the first mo ...
ratios, or charging higher rates on loans with a higher
loan-to-value
The loan-to-value (LTV) ratio is a financial term used by lenders to express the ratio of a loan to the value of an asset purchased.
In Real estate, the term is commonly used by banks and building societies to represent the ratio of the first mo ...
. Differential pricing of this nature is also referred to as "pricing for risk".
See also
*
UK mortgage terminology
This article gives descriptions of mortgage terminology in the United Kingdom.
Introduction
The UK mortgage market is one of the most innovative and competitive in the world. Most borrowing is funded by either mutual organisations (building socie ...
*
Mortgage loan
A mortgage loan or simply mortgage (), in civil law jurisdicions known also as a hypothec loan, is a loan used either by purchasers of real property to raise funds to buy real estate, or by existing property owners to raise funds for any p ...
*
Remortgage A remortgage (known as refinancing in the United States) is the process of paying off one mortgage with the proceeds from a new mortgage using the same property as security. The term is mainly used commercially in the United Kingdom, though what it ...