Credit-impaired mortgage numbers fall: Moneyfacts

The number of credit-impaired residential mortgages has declined by almost a third in the last six months, according to data collected by Moneyfacts.

With the overall number falling from 851 to 590.

The data also shows that the average two- and three-year fixed rates for credit-impaired mortgages has fallen, declining by 0.13 per cent and 0.30 per cent respectively in the same time frame.

The average two-year fixed rate has dropped from 4.49 per cent to 4.36 per cent, and the average three-year fixed rate fell from 4.51 per cent to 4.21 per cent.

Meanwhile, the average five-year fixed rate has increased in the past six months, rising from 4.76 per cent to 4.92 per cent.

Furthermore, Moneyfacts adds that 91 per cent of all credit-impaired mortgage products are only available through a mortgage broker.

The firm says that while credit-impaired mortgages are riskier than their full status resident mortgage counterparts, the current market is an entirely different lending environment to the climate before the onset of the financial crisis.

Moneyfacts finance expert Darren Cook comments: “Back in August 2007 there were 5,106 credit-impaired deals available – nearly 10 times as many as there are now – which accounted for 55 per cent of the entire residential mortgage market.

“However, the average two-year fixed credit-impaired rate is still a far cry from the average two-year fixed rate of 2.48 per cent available to full status borrowers.”


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