Lenders reluctant to cut mortgage rates

| September 16, 2009 | 0 Comments
Lenders reluctant to cut mortgage rates

Homeowners are gradually being offered a larger choice of mortgage products, although lenders remain cagey about attracting too much business, MoneyFacts.co.uk claimed this week

The number of mortgage products available dropped to a record low of 1,209 at the beginning of April, down from a peak of 11,951 products that were available in July 2007.

Since April, more products have come to market, and the total number available has crept up to 1,392.

Borrowers who own at least 25% of their property have the biggest range of mortgages to choose from.

Homeowners with a 10% deposit have also seen their options gradually increase. However, they could find themselves paying up to 2 percentage points more in interest compared to borrowers with a 40% deposit.

“The lack of any real competition in the market is still having a huge impact,” said Michelle Slade, MoneyFacts.co.uk spokesperson.

“None of the big lenders seem to want to be the first to cut rates as they are worried they will be swamped with applications.

“Lenders may be open for business, but we need more bold moves from some of the bigger players before borrowers start to see any real benefit.”

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