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Mortgage choice broadens for big deposit-holders

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Mortgage applicants with a 20% deposit have seen a threefold increase in the number of deals on offer in the last two years.

The number of deals on offer in February rose to 390, up from 97 two years ago.

The keenest rates are still only available to those with a 25% deposit but the number of deals demanding a 40% deposit also fell 28% to 187, reports Moneyfacts.

Two years ago the number of prime residential mortgage products fell to an all time low of 1,097, but the number of mortgages available now has more than doubled to 2,447.

The number of deals available to 90% deposit holders jumped from 94 in February 2009 to 214 in 2011, with 85% deals rising to 560, from 159 in 2009.

Product numbers continue to improve said Michelle Slade, spokesperson for Moneyfacts, but warned other factors including falling mortgage approvals, lenders’ poor appetites to lend and the rising costs of fixed rate loans continue to hold back the market.

“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,” said Slade.

However, she added: “Increases in fixed mortgage rates combined with talk of a base rate rise sooner rather than later have resulted in heightened activity amongst existing borrowers looking for a new deal.”


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