Mortgage products increase but FTBs still struggling

| December 2, 2010
Mortgage products increase but FTBs still struggling

First-time buyers (FTBs) are still struggling to get a foot on the ladder, despite a steep rise in the number of mortgage products available.

Mortgage deals for those with a small deposit has doubled, according to Moneyfacts.co.uk, with more than 1,000 mortgages on the market for those with a 20% deposit or less.

However, while those with lower deposits have seen an increase in choice, average interest rates for prospective homebuyers with 10% deposits are above the 6% mark.

Moneyfacts believes that the lack of competition among 90% mortgages has kept rates high.

Michelle Slade from Moneyfacts, comments: “House prices continue to fall in many areas and worries over borrowers getting into negative equity may mean that rates for those with a small deposit remain high for some time to come.”

The fact that FTBs are struggling to secure a mortgage unless they have a hefty deposit are reflected in recent mortgage approval figures.

The British Bankers’ Association (BBA), the Bank of England and the Council of Mortgage Lenders (CML) have all reported falls in mortgage lending over recent months and this is expected to put pressure on house prices.

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