Mortgage deals are still being rationed by lenders
Mortgage lenders begin to ration the size of their loans to people remortgaging and property buyers
Moneyfacts , a financial information service says ,This year, there is an increase in the number of deals by sixty six percent from 1,414 in January to 2,351 now. However fifty eight percent of the deals obtainable still need a downpayment of at least twenty five percent of the price of the home or property being bought. And the amount requiring only a ten percent deposit still stands at eight percent of all the mortgages at present on offer.
Michelle Slade of the Moneyfacts, says there has been no actual movement in the total number of new mortgages deals obtainable on the market (in the previous month), however those that are obtainable continue to be competitive. Most of the great deals are now available for a twenty five percent deposit, having previously only been obtainable for those with the forty percent deposit.
Lower rates
Even though there has been small change this year in the proportion of the mortgage deals needs less deposits, the average rate of interest is being charged on them has mentioned down.
The average two year fixed rate mortgage deal now comes with a rate of 4.5 percent interest compared to interest rate of 4.9 percent in January.
Three-year deals now cost on average 5.2 percent rather than 5.5 percent at the beginning of the year, and five-year fixed interest rates now cost 5.6 percent rather than the 6.1 percent charged in January.
But these figures disguise the very huge difference in the interest rate being charged based on the size of the deposit being made.
According to Moneyfacts, a two-year fixed rate mortgage deal with just a 10 percent deposit comes with an interest rate of 6.2 percent, but a 25 percent of deposit brings that down to 4.1 percent whereas the 40 deposit attracts an interest rate of just 4 percent.
