Larger mortgage deposit 'makes applicants less of risk'

Date:Friday 21st May 2010
Author: Max Freedman

Mortgage applicants who have put together a large deposit are seen as less of a risk to lenders, according to one sector commentator.

Chief executive officer of Firstrung Paul Holmes described this situation as "the only way it isn't difficult to get a mortgage", claiming that a 25 per cent deposit categorises a person as a benign risk in terms of lending.

He suggested that the mortgage lending climate is currently similar to the 1980s, with banks looking into applications in more detail if people have less than this size deposit.

Mr Holmes stated: "Applications are down and rejections are higher than they have been at any time during the previous decade."

His comments follow research by, which suggested the end of a decade of relatively easy credit has left a lasting impression on mortgage applicants.

According to a poll by the website, 40 per cent of people believed they needed at least a 20 per cent deposit in order to secure a mortgage over the past year.