More mortgages on offer for borrowers with bad credit
The number of credit-impaired mortgage deals on the market has risen by 118 in the last six months alone, according to Moneyfacts.
The financial information provider found that there are now 843 mortgages available to those with a less than perfect credit history, compared to just 725 in February.
Charlotte Nelson, finance expert at Moneyfacts.co.uk, said: “Credit repair mortgages represent a small proportion of the mortgage market – just 17%.
“However, in the past six months, the number of deals has increased by 118 to stand at 843 in August. This is good news for borrowers who have struggled with a poor credit history in the past and had difficulty in obtaining a mortgage.
“With fierce competition in the mainstream market, providers have opted to branch out into more niche areas, including adverse credit mortgages. This extra attention has resulted in an increase in the number of deals available to this type of borrower.”
Despite the boost in the number of deals, Moneyfacts found that the average two-year fixed rate for those with a poor credit history has risen a whopping 0.17% in the past six months to stand at 4.52%.
This is compared to an average standard two-year fixed rate mortgage stands at 2.54%, a massive 1.98% lower than the credit-impaired average.
Nelson pointed out that, “while the difference may appear stark, the higher prices do reflect the extra risk that is involved to the provider”.