Moneyfacts: Quarter of mortgages require 40% deposit

Date:Tuesday 6th January 2009
Author: Rachel Fletcher

Borrowers need a 40 per cent deposit for a quarter of all mortgages, new figures show.

Michelle Slade of Moneyfacts said mortgage lenders are "looking to cherry pick the best customers".

Moneyfacts found that for borrowers with a five per cent deposit or less, there are only 21 mortgage options available.

In February last year, the figure was 1,200.

At that time, there were 24 mortgage products available for 40 per cent deposits, but now there are 341.

More data from Moneyfacts, studying the effect of last month's base rate reduction, shows that 76 per cent of mortgage lenders have decreased their standard variable rates (SVRs).

Just 19 gave their customers the full benefit of the reduction.

Of the providers that reduced their rates, 72 per cent made cuts of 0.15 per cent to 0.99 per cent and five still have SVRs of six per cent or higher.

Ms Slade said that some building societies were not reducing their SVRs in order that savers may benefit, although she noted that the three lenders with the biggest SVRs have reduced savings rates beyond the base rate decrease.