100% mortgage deal market 'shrinking'

22-Feb-2008

It may be useful for first-time buyers to note that their mortgage options are being reduced as lenders cut back on their products.

There are only two lenders currently offering the 125 per cent mortgage- Northern Rock which has priced itself out of the market and Birmingham Midshires Solutions which is lending only through intermediaries.

However, Moneyfacts has noted that mortgages of 100 per cent loan to value or more are also becoming increasingly harder to find in the property market.

Julia Harris, analyst at Moneyfacts, commented: "Prospective first-time buyers are those that are going to be most affected by this move. Not only are there fewer options for those without a deposit but they will also find themselves having to pay a larger premium for the added risk that the lender is taking on."

In light of cooling house prices with a further drop forecast by some analysts, the group advises that it may be a good strategy for borrowers to take advantage of current high savings rates.

Property asking prices rise Professional mortgages 'could escape credit crunch'

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