Mortgage boost for small deposit borrowers

Category: Mortgages
Date: 6/30/2009

The number of mortgages available to borrowers with just a 10% deposit has increased over the last month, according to research from Moneyfacts.co.uk.

While the overall size of the residential mortgage market has shrunk by 5% over the last four weeks, borrowers looking for loans at 90% loan to value have seen their choice of products widen.

Amongst the new entrants into the market are Britannia BS, Cambridge BS, Earl Shilton BS, Leek United BS and Saffron BS.

Meanwhile, the cost of fixed rate mortgages has continued to rise, with the average five year rate hitting 6.00%, its highest level since December last year.

The average rate on two year fixed rate mortgages has also continued to increase and now stands at 5.08%.

"The demand for fixed rate mortgages continues to increase as borrowers look to fix their repayments ahead of expected rates rises," said Louis Kaszczak, head of Moneyfacts.co.uk.

"Those that are looking for a new fixed deal need to act fast as the lenders continue to fall over each other to increase rates. No one seems to want to offer the lowest fixed rate deal at the moment."