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Discount mortgage numbers drop 72%

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  • 08/07/2010
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Discount mortgage numbers drop 72%
As the mortgage product market passed the 6,000 mark for the first time since November 2008, according to Mortgage Brain, further analysis shows fixed and tracker loans continue to grow in popularity where discounts have fallen from favour.

Independent financial research company Defaqto revealed fixed rate mortgage numbers have risen 33% with 36% more tracker mortgages also available against three years ago, but the number of discount mortgages has fallen 72%.

David Black, banking specialist at Defaqto said: “There are significant differences in the Standard Variable Rates (SVR) being charged by lenders and given that discounted mortgages tend to be linked to the SVR this is a key reason for their decline in popularity. Lenders with competitive SVRs have little incentive to offer discounted mortgages because profit margins on their fixed and base rate tracker mortgages are better.”

The average SVR offered by UK lenders is 4.77%, with Nationwide and Lloyds among the lenders offering the lowest SVR around at 2.50%. The highest SVR offered by a mainstream lender is 6.08%.

 

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