Property buyers 'offered fewer discount mortgages'

Thursday, July 8th 2010

While there are a greater number of fixed-rate and tracker mortgages on the market today than there were three years ago, the number of discounted deals has fallen.

Research by Defaqto shows those saving their cash for a new home will be able to choose from 36 per cent more tracker offerings and 33 per extra fixed-rate deals than they would have done in 2007.

But this may have been offset by a decline of some 72 per cent in the number of discount-rate mortgages available.

David Black, banking specialist at the independent financial research firm, says a rise in the variety of standard variable rates (SVRs) being offered by lenders has resulted in the loss of so many discounts.

"Lenders with competitive SVRs have little incentive to offer discounted mortgages because profit margins on their fixed and base rate tracker mortgages are better," he explains.

The news may affect young, single people the most, with Santander recently suggesting an increased number of people are now buying before they get married or settle down.