Proper debt management could be needed for current mortgage deals
Proper debt management could be needed for current mortgage deals
Friday 8th May 2009
New data from MoneyFacts has shown that the recession is reshaping the mortgage landscape and has resulted in a 61 per cent increase in the number of new mortgages carrying 40 per cent minimum deposit in just the last six months.
Over the same period, mortgages that require a ten per cent deposit have fallen by two thirds and consumers who go for these can only choose from 71 products that have an average repayment rate 5.98 per cent.
The mortgage gap between the rich and poor has also widened, according to the organisation, because products that require a 40 per cent deposit are now 1.63 per cent down in terms of price, while the ten per cent deposit deals are only 0.74 per cent cheaper.
According to Darren Cook, an analyst at Moneyfacts.co.uk, in light of projections that the Bank of England will keep the base rate frozen for the remainder of 2009, consumers will not get better products any time soon.
"Banks are far from predicting the end of the housing slump and are hedging their bets by increasing the number of their best mortgages to those who are fortunate to have a 40 per cent deposit," he said.
"We will only see better mortgage rates across the board if banks regain their appetite for responsible lending and healthy competition for new business returns to the market."
This week the Bank of England's monetary policy committee voted to continue keeping interest rates at the historic low of 0.5 per cent level.
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