Homebuyers were offered a mortgage lifeline yesterday from the Royal Bank of Scotland (RBS).
The RBS revealed its plan to offer £9 billion of new mortgages throughout the UK and £16 billion in loans for small to medium sized enterprises (SMEs). According to the RBS, there will also be more cash available if customer demand proves high.
This mortgage lifeline will no doubt receive cheers from first time buyers hit hard by the recession.
This scheme comes as the RBS offloads £325 billion of debt to the new asset protection scheme from the government, whereby the RBS will have to accept losses up to £19.5 billion but of any losses following that, the government will bear 90 per cent of them. The condition of joining the asset protection scheme is that the bank must make available increasing lending to potential borrowers.
Homebuyers will be able to apply for mortgages of up to 90 per cent loan to value.