The Number of Mortgage Products Has Doubled

There are now twice as many prime residential mortgage products available, compared to two years ago, but lending conditions remain tough.

There were only 1,097 prime residential mortgage products available two years ago, which was an all time low.

Now there are 2,447 different mortgage products, Moneyfacts.co.uk has found, and borrowers with a 20% deposit have currently got three times as many mortgages available to them as two years ago.

There has been a shift towards small deposit requirements in the mortgage market with those with a 25% deposit finding the best deals and the number of products requiring a 40% deposit is falling as a result.

Whilst the greater availability of mortgages is good news for house buyers, there is still a strong reluctance to lend by the mortgage companies, as Michelle Slade, spokesperson for Moneyfacts.co.uk explains:

“The increase in the number of mortgage deals for those with smaller deposits is encouraging, but only a limited number of such mortgages are likely to be approved.”

“Borrower affordability remains the key factor in lending decisions and lenders remain strict over which borrowers they will accept.”

Affordability calculations are likely to be restricted further as a result of the Mortgage Market Review announced by the FSA recently. The spectre of rising interest rates could also make it difficult for borrowers looking to buy property.