Money News

More mortgage deals for buyers with small deposits

Wednesday, 27 January 2010 Writes Hazel Cottrell hazel.cottrell@consumerchoices.co.uk

If you’ve got a 15% deposit, you’ll now find more mortgage deals on the market, and some lenders are even cutting mortgage rates.

The mortgage market is opening up to first-time buyers once again, as lenders are becoming more comfortable lending at high loan-to-value (LTV) levels.

Lower rates at the higher LTV end of the market will give many more potential first-time buyers the opportunity to get on the property ladder.

The number of mortgages available at 85% LTV has increased by 22% since December 2009, according to moneysupermarket.com. And the number of deals available at 90% LTV has risen by 11% and average mortgage rates have fallen across the board.

Hannah Mercedes Skenfield, mortgages channel manager at moneysupermarket.com, said lenders are clearly more open to mortgage lending than they have been for some time.

She warned, however: “Last week’s news of Skipton Building Society increasing its standard variable rate (SVR) indicates we may see an increase in rates elsewhere in the mortgage market.”

Chris Eagle, commercial manager at Creditchoices.co.uk, said: “Lower rates at the higher LTV end of the market will give many more potential first-time buyers the opportunity to get on the property ladder.

“If you’re looking to buy, be sure to download our free Complete Guide to buying your first home.”

He advised those who already have a mortgage: “If your lender has increased your SVR, read my advice on whether to stick or switch to another mortgage deal.”