Homebuyers have seen the deposit they need to put down for a mortgage triple during the past two years.
The average deposit demanded by lenders has soared from just nine per cent of the amount being borrowed in August 2007, when the credit crunch struck, to 26 per cent, according to financial information group Moneyfacts.co.uk
As a result, the amount of money people need to put down in order to qualify for the average mortgage has risen from £13,500 on a typical £150,000 loan to £39,000.
There are only eight mortgages available for people looking to borrow 100 per cent of their home’s value, most of which have restrictions, and only nine for people with only a five per cent deposit, down from 238 and 982 respectively two years ago. At the same time, there has been an 83 per cent decline in different fixed-rate mortgages available to people borrowing up to 90 per cent of their home’s value and a 95 per cent drop in the number of variable rate deals for people with only ten per cent to put down.
By contrast, the number of fixed-rate deals for people with a 40 per cent deposit or equity stake has soared from just nine in August 2007 to 211 as lenders look to cherry-pick customers who pose least risk.