The number of mortgages available for borrowers has started to increase since April, according to Moneysupermarket.
According to the comparison website, the increase coincides with the Bank of England’s Funding for Lending scheme being introduced.
Moneysupermarket’s analysis found that the increase was particularly prevalent among the 60, 75 and 80 per cent loan to value (LTV) products.
Since April, there has been a 14 per cent increase in the number of 75 per cent LTV mortgages available, rising from 636 to 725. For 80 per cent LTV’s, there has been a 17 per cent increase, from 381 to 446.
Rates on fixed mortgages have started to fall slightly, with rates on two year fixed mortgages falling from 4.21 per cent in April, to 4.05 per cent, compared to rates on two year tracker mortgages which has risen from 3.58 per cent to 3.74 per cent.
Although the fall in fixed rates is welcome, this is often being offset by the rise of the cost of fees with average total fees for a two year fixed mortgage increasing from £1,170.50 to £1,370.16, a 17 per cent increase since April. Many borrowers may find they are actually paying more for their mortgage despite the fall in rates, Moneysupermarket said.
Mortgage expert Clare Francis said: “Attempts by the Bank of England to stimulate the economy to start lending again through its Funding for Lending Scheme, making £80 billion of lending available at a low cost to the industry, has spelled some good news for borrowers. Our analysis shows there are now more mortgages available than six months ago, and fixed rates have been falling since April.
“However, this is masking the true picture of the total cost of a mortgage. While fixed rates have come down, arrangement fees have increased, offsetting much of the impact of lower rates, meaning it is not necessarily any cheaper to get a mortgage now, despite the funding initiative. It’s also worth noting that the average rates on tracker mortgages are higher than they were six months ago.”
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