Low-deposit mortgages falling

Date:Tuesday 7th October 2008

The number of low-deposit mortgage products available is dropping as the credit crunch takes hold.

Finance information website Moneyfacts says the number of deals available for buyers with a five per cent deposit has gone from 384 at the beginning of April to just 60 now, the BBC reports.

The small deposit deals are available from major lenders such as Abbey, Halifax and Nationwide.

But Ray Boulger of mortgage broker John Charcol told the BBC that even they may withdraw the offers.

Aaron Strutt of Chase de Vere, another mortgage broker, also said that a lender stops the five per cent deposit deal approximately every week.

Last week, John Charcol advised people seeking a new mortgage deal to look "sooner rather than later" as the money markets continue to freeze up.

The mortgage broker pointed out that as the inter-bank lending rate fluctuates, lenders are not likely to reduce tracker margins above the bank rate they offer.