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News: Home Mortgage Deals Improve For Those With Large Deposits

Wed, 04 Aug 10

The number of mortgage deals on offer has risen by 66% since the start of the year but most are still reserved for those with large deposits.

According to latest figures from Moneyfacts there are now 2,351 deals on offer, compared to just 1,414 in January.

However, for 58% of these a deposit of at least 25% is needed. Only 8% of deals now require a deposit of 10%.

Michelle Slade from Moneyfacts says despite large deposits being required lending conditions are improving.

She said: “Many of the best deals are now available for a 25% deposit, having previously only been available for those with a 40% deposit."

Moneyfacts data shows that the interest rate on an average two-year fixed rate deal is now 4.5%, compared to 4.8% at the start of the year.

Three year fixed rate deals will cost borrowers more. The average interest rate for these deals is now 5.2%, compared to 5.5% at the beginning of the year.

These rates rocket though for those with a small deposit. The average interest rate on a two-year fixed rate deal for those with a 10% deposit is 6.2%. For those with a 25% deposit the rate plummets to 4.1%.

By Joe Lepper 

See also: Asking Price Index, House Prices and Trends by Town and Postcode, Mortgages, Life Insurance and Mortgage Protection Guide

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