Mortgage marketing is making life tricky for borrowers who have more than 10,000 home loan products to choose from.
Banks and building societies are now packaging products so comparison at times can be rather complex.
In a year, the number of available mortgages has increased by 123% from 4,665
to 10,418, but who is actually borrowing to buy or remortgage a home?
In the same period, gross mortgage lending has stuck around the £9.5 billion a
month mark and is expected to stay around that level for some time, according to
the Council of Mortgage Lenders.
To put that in perspective, the CML recorded record lending figures at the height
of the house price bubble – £362 billion or an average of £30 billion a month in
2007.
Some believe that whilst the number of mortgage products may have increased, borrowing is still constrained as lenders fight to cherry pick the best customers to bolster the quality of their mortgage books.
Lenders shave a whisker of headline rates to attract borrowers – but often load their deals with fees booking fees, administration fees and arrangement fees to boost their profits.
These fees are steadily rising and can add up to around 3.5% of the borrowing.
Anyone looking for a mortgage or remortgage should look beyond the headline
interest rate and carefully work out the cost of the mortgage including fees.
Just looking at the monthly repayments or interest rates is not enough to select the best deals.
Broker mortgage provider Mortgage Brain says hundreds of new loan packages were added in March alone.
§ Fixed rate loans were up 10% with 602 new products – taking the total from
5,948 to 6,550.
§ Variable rate mortgages stayed around the same, with five new products –
taking the total to 1,111.
§ Trackers decreased from 2,841 to 2,757.
Chief executive Mark Lofthouse said: “The number of products with higher loan-
to-value ratios is also increasing, which again is good news for brokers and their
customers.”
