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Mortgages: See but don’t touch
Two years ago the number of prime residential mortgage products fell to an all time low of 1,097. Today, the number of mortgages available has more than doubled to 2,447.
Borrowers with a 20% deposit have seen a threefold increase in the number of deals on offer.
Many lenders are now making their best deals available to those with a 25% deposit, resulting in the number of deals requiring a 40% deposit falling.
While the availability of mortgages continues to improve, other factors are not so favourable.
Latest figures from the Bank of England show a fall in mortgage approvals and the cost of fixed rate mortgages continues to rise.
LTV |
February 2009 |
February 2011 |
Change |
90% |
94 |
214 |
+128% |
85% |
159 |
560 |
+252% |
80% |
97 |
390 |
+302% |
75% |
422 |
851 |
+102% |
60% |
261 |
187 |
-28% |
Source: Moneyfacts.co.uk 1.2.11 |
|||
Michelle Slade, spokesperson for Moneyfacts.co.uk, commented:
“Although lenders’ windows may be full of best buy deals, it doesn’t mean they are wanting to lend.
“The increase in the number of mortgage deals for those with smaller deposits is encouraging, but only a limited number of such mortgages are likely to be approved.
“Borrower affordability remains the key factor in lending decisions and lenders remain strict over which borrowers they will accept.
“Household budgets continue to be stretched by the rising cost of living, which is having a detrimental effect on borrowers’ fixed costs and their ability to get a mortgage.
“Increases in fixed mortgage rates combined with talk of a base rate rise sooner rather than later has resulted in heightened activity amongst existing borrowers looking for a new deal.
“Borrowers who have benefitted from record low interest rates for the last two years may be in for a shock when it comes to finding a new deal.
“Rising rates and the implementation of the Mortgage Market Review are likely to restrict affordability calculations further, meaning some borrowers will struggle to borrow as much as they need despite the increased number of mortgage products available.
Moneyfacts Group
Moneyfacts is the UK’s leading independent provider of personal financial information and our data is used and trusted throughout the financial industry.
Think carefully before securing other debts against your home, your home may be repossessed if you do not keep up repayments on your mortgage.
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We normally do not charge a fee for mortgage advice, however this is dependent on your circumstances. Our typical fee would be £349