Mortgages Available on the Rise

The number of mortgages available to prospective buyers has increased over the past month with over 1700 mortgage deals with a deposit of 0-40% available at the beginning of this month.

This figure showed a 6% increase on February and a massive 68% rise on this time last year.  This comes according to research from the financial information service Moneyfacts.

Out of these deals available though, there are still only very few available with a 0-5% deposit. However there has been a significant rise in the number of deals with a 10-15% deposit available, there are now 489 such deals on the market, almost double the number of this time last year of just 258.

Michelle Slade, an employee of Moneyfacts said, "There are a growing number of mortgage providers who are becoming a little more accommodating with their credit criteria and this bodes well for consumers who will benefit from a growing competitive mortgage market,

"It is pleasing to see that the average mortgage rate is falling at the same time as deposit requirements are getting smaller."

 Further good news comes from the number of lenders that have decreased their interest rates on mortgages over the past few weeks.  These include, Lloyds, RBS, Cheltenham & Gloucester, Northern Rock and Alliance & Leicester, with most cuts being between 0.1% and 0.5%.

Furthermore, RBS has also increased its maximum advance for first time buyers, they have doubled it for £150,000 up to £300,000, giving more indication of the current willingness to lend in the market.

"The biggest reductions in interest rates have tended to be at the highest loan-to-value (LTV) levels, at 85% in particular," said Ray Boulger of mortgage brokers John Charcol.

"It tells us partly that lenders have more money to lend," he added.

The willingness of lenders has increased due to the constant rise in house prices over the past year, meaning they have new been able to lend against an appreciating asset, rather than a depreciating one.

Boulger also added, "Increasingly in the last few weeks, some lenders have improved their offerings over 75% LTV, which is down to the consideration that it is more commercially viable - the risk is that much less."

Despite the positive outlook of these figures, the number of mortgage deals requiring more than a 25% deposit has stayed fairly high, 57% of deals still need this level of down payment compared with 68% last year.  However, going back a couple of years to before the credit crunch began to bite, in August ’07, just 16% of mortgage deals required a deposit of 25%.

Posted at 11:10AM Mar 08, 2010 by Marc Stenton in Mortgages & Housing Market  |  Comments[0]