Number of mortgage deals double in two years

Figures released today from Moneyfacts show the number of mortgages available has more than doubled to 2,447, compared to 1,097 two years ago.

Two years ago the number of prime residential mortgage products fell to an all time low of 1,097.

Borrowers with a 20% deposit have seen a threefold increase in the number of deals on offer.

Moneyfacts says many lenders are now making their best deals available to those with a 25% deposit, resulting in the number of deals requiring a 40% deposit falling.

But Michelle Slade, spokesperson for Moneyfacts.co.uk, says although lenders’ windows may be full of best buy deals, it doesn’t mean they are wanting to lend.

She says: “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.

“Household budgets continue to be stretched by the rising cost of living, which is having a detrimental effect on borrowers’ fixed costs and their ability to get a mortgage.”

She adds: “Increases in fixed mortgage rates combined with talk of a base rate rise sooner rather than later has resulted in heightened activity amongst existing borrowers looking for a new deal.

“Borrowers who have benefitted from record low interest rates for the last two years may be in for a shock when it comes to finding a new deal.

“Rising rates and the implementation of the Mortgage Market Review are likely to restrict affordability calculations further, meaning some borrowers will struggle to borrow as much as they need despite the increased number of mortgage products available.”