Could Mortgage Indemnity Insurance be Making a Comeback?

Lloyds Banking Group, the UK's largest mortgage provider has said that if insurers offered banks protection against borrowers defaulting on loans, U.K. first-time homebuyers could double.

Stephen Noakes, Commercial Director for Mortgages at Lloyds said, “There’s been a lot of conversation recently about mortgage indemnity and whether it’s a way to manage the transference of risk. You could be missing an opportunity to double the first-time buyer market.”

Many of the UK's largest housebuilders have been looking into this as they have seen there first time buyer base dwindle, as banks have asked for 25% deposit on houses.  By offering indemnity insurance, this figure may decrease to 10%, a much more affordable sum for first time buyers.