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The number of mortgage products on offer has rocketed by more than a third since April.
The latest figures from Moneyfacts.co.uk report that there are now 1,624 mortgages deals on the market, up from 1,209 in April.
That is still a massive reduction on the 15,599 deals that were available at the peak of the market in July 2007, but is a further positive sign that competition is returning to the market, albeit slowly.
The greatest increase has been in the number of two-year fixed rate mortgage products. In April there were just 250 such deals to choose from, while today there are 405. The average interest rate charged on a two-year fixed rate has fallen from a peak of 5.21% in August to 4.93%.
There are now 352 three-year fixed rate deals available, a 22% increase since April, and 297 rates fixed for five years or more, compared to 259 in April. In contrast to two-year deals, the cost of three-year fixed rates has risen since the summer to stand at an average of 5.6%, while a five-year fix will cost 6.15% on average.
The number of mortgages on offer for borrowers with small deposits is still severely limited – there are nine deals available at 95% loan to value, up from just three in April. And there are 116 for those with a 10% deposit to choose from, up from 72 in April.
Michelle Slade, spokeswoman for Moneyfacts.co.uk, said:
"In such uncertain times, borrowers and lenders alike seem to prefer shorter term deals, where changes can be made relatively quickly if market conditions change dramatically. Increased competition in the two-year market has increased the competitiveness of the deals available, but at £928, the average arrangement fee remains more than £100 higher than on longer deals.
"Borrowers' love affair with shorter term deals means lenders benefit from the increased frequency with which arrangement fees become payable."
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The July/Aug issue of Your Mortgage is on sale now. In it we explain who now owns which UK banks and building societies; the ins and outs of interest-only mortgages, who they are appropriate for and the options for paying them off; we explain how offset mortgages work and how you could use one to make the most of your money, and why buying property overseas right now could be a smart move – if you look in the right place and arrange the right finance. Get your copy for the latest news, information and help.
The Your Mortgage Awards aim to reward those lenders that have excelled in providing innovative and competitive products. Widely regarded as the UK's definitive consumer mortgage awards, the Your Mortgage Awards have now been running for 20 years.





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