Six out of 10 borrowers could struggle to get a mortgage from a high street bank
or building society in the next 12 months because they cannot put down a deposit
of more than 25%, according to research from mortgage broker Legal & General Mortgage
Club (L&GMC).
It said the choice of deals available direct from high street lenders remains tiny:
those with 10% would only have access to 17% of best-buy products.
The research, conducted with the Association of Mortgage Intermediaries, was produced
to encourage consumers to consider using a broker to find a mortgage.
Ben Thompson, managing director of L&G MC, said: "On average, most of the 60% of
borrowers who have less than 25% deposit, will be disappointed with what is available.
Lenders prefer borrowers with the highest deposits, incomes and credit scores. Some
of the Best Mortgages are available now compared to last year.”
THE BEST MORTGAGES
Facts and figures about the best mortgages
"Applicants who apply direct run the risk of a refusal and therefore damage to their credit record. They will benefit immensely by taking independent advice about their application and the most suitable mortgage products."
As the mortgages available become more competitive between lenders, it seems that the property market in the UK will be able to follow suit after a period of being a primarily rental market. There is a selection of new build apartments on the market that are suitable for single professionals and families, but because it has been difficult getting a mortgage approved, especially for first time buyers, these properties have been on the market for a while.
The popularity of fixed rate mortgage deals is only expected to last for the next six months, and could well be a sign that borrowers are uneasy about potential changes in interest rates due to the current political climate. This has been reflected in the interest in short term mortgage deals as opposed to longer term fixed rate options. With interest rates at a favourable level, locking into a plan for two years is an attractive option; this short term commitment will bring financial security to borrowers until the financial markets find an even keel.
One of the best short term fixed rate mortgage deals available to UK residents at the moment is offered by the Cooperative Bank. The two year fixed rate 75% LTV mortgage has an interest rate of 2.95% and 4.1% APR, with the interest reverting to 4.24% after the initial 2 year term. This mortgage deal comes with an £849 arrangement fee, a £140 booking fee and can be used for loans between £5,000 and £1.5m.
(Rates and Fees are correct at time of press - 100% Mortgages are available subject to terms and conditions)
