Mortgage News
Lenders cherry picking customers: Moneyfacts
First-time-buyers and those on small deposits are being offered little incentive to enter the market, according to the latest Moneyfacts figures.
Increasingly fixed-rate deals are for those with significant equity. Moneyfacts said that the average two-year fixed-rate deal for a borrower with a 10% deposit has increased steadily since April 2009 and now stands at 6.48%, its highest level since December 2008.
By comparison, the average rate for a borrower with a 25% deposit stands at 4.27%, the lowest level since July 2009.
Michelle Slade, spokesperson for Moneyfacts, said lenders are continuing to make borrowers pay a heavy price despite increasing the number of available deals.
She added: “On average, borrowers with a 10% deposit pay £4,728 more over two years than those with a 25% deposit. Lenders continue to cherry pick the best customers and appear to be actively discouraging borrowers with a small deposit from remortgaging.”
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