Fewer mortgages for new buyers

Posted by Yell News Bloggers in Family and Finance, Loans and Credit Cards, Mortgages on September 22nd, 2009

Number of mortgages available for first-time buyers falls 17%

The number of mortgages available to first-time buyers has fallen by 17% since the beginning of the year as lenders continue to shun borrowers with small deposits, research has shown.

There are currently only 101 different mortgages available to people looking to borrow 90% of their home’s value, down from 122 at the beginning of the year and 903 in July 2007, before the credit crunch first struck.

But the number of home loans aimed at people with a 40% deposit has soared during the same period, rising from just 17 in July 2007 to 251 in January this year and 320 now.

Financial information group Moneyfacts.co.uk said the fall in mortgages with a 90% loan to value ratio (LTV) showed first-time buyers were continuing to be ignored by lenders as they cherry-picked lower-risk customers.

Banks and building societies are also failing to pass on falls in their own funding costs to people borrowing a high proportion of their home’s value.

The average two-year fixed rate mortgage for someone with a 10% deposit has fallen by only 0.12% to 6.12% since September 2007, despite the Bank of England base rate dropping from 5.75% to a record low of just 0.5% during the same period.

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Tags: banks & financial institutions, building societies, financial advisers, loans, money