Over the last year the number of mortgages available to borrowers has grown significantly, with borrowers who have a 20% deposit or less seeing the biggest improvements.
At the same time, rates continue to fall, with the average two, three and five year fixed rates all standing at the lowest level seen since Moneyfacts records began in 1988.
Although lenders’ windows may be full of best buy deals, borrowers are showing no signs of rushing to apply, as latest figures from the Bank of England show that for the sixth month in a row mortgage approval numbers fell.
Michelle Slade, spokesperson for Moneyfacts.co.uk, commented:
“Many borrowers have reverted to their lenders’ standard variable rate, with rates as low as 2.50%.
“While average fixed rates may be at an all time low, they are still uncompetitive in comparison.
“A rise in Bank Base Rate still appears elusive and borrowers are opting to make the most of low mortgage repayments while they can.
“Lenders are doing their best to tempt borrowers into remortgaging, but at present there appears to be little appetite to take up the deals.
“The best deals are being offered to borrowers with at least a 25% deposit as lenders vie to attract the more asset rich borrower.
“Borrowers with smaller deposits are seeing signs of improvement, but the rates on offer to borrowers with just a 10% deposit remain high.
“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.”
Filed under: Real Estate