Hospital Liaison Committee

Hospital Liaison Committees

Higher Lending Charges

Higher Lending Charge. A charge that is sometimes made if a borrower wants a mortgage that exceeds 75% of the propertyâ€(tm)s value. This figure is known as the ‘Loan to Valueâ€(tm). The charge only applies to the additional lending required, over the 75% threshold. The money is used to pay an insurance premium that protects the lender from losing money should they have to repossess the house for any reason. Although it is the borrower who pays for this insurance, they receive no benefit from it.

This is the Higher Lending Charge (it was previously known as a Mortgage Indemnity Guarantee). It is levied by around three quarters of all lenders on clients who cannot afford to put down a deposit of 10% of the price of the property. In practice it is a type of insurance aimed at protecting the lender should you default on your mortgage when the value of your home is less than the capital you borrowed. The insurance only provides cover for the lender, not you, and typically costs £1,500.

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