Mortgages in the UK have dropped to where they were a year ago, according to a recent report from Moneyfacts. The average rate for a two-year fixed deal is approximately 6.59%, compared to 6.56% in August, 2007. That’s down from a high of 7.08% in early July of this year, showing a significant drop over the past month.
Of course, there are some caveats to the figures, as the best rates are available to those with the best credit and largest deposits. Additionally, lenders are charging higher fees for mortgages and the costs do remain high. The average mortgage arrangement fee is currently at £964, compared to £803 a year ago.
“The pricing is getting back to where we were a year ago, but the appetite for lending is diminished,” said Darren Cook, a spokesman for Moneyfacts.
Another factor that is indicative of the housing slowdown is the fact that there are significantly less mortgage products available to potential buyers. There are just 3,748 different products now available, compared to a whopping 13,027 in August of 2007. On top of that, most lenders are requiring higher deposits than a year ago, with an average of 20% now the norm to even get a mortgage. Last summer, 33 lenders offered 100% mortgages to potential buyers, but this year only two are doing so.
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