January saw the mortgage rates on tracker deals, which are determined by the Bank of England base rate, reach a record low, giving borrowers and the housing market a much-needed boost.
The Bank of England has shown figures that the average rate charged on tracker mortgages which have a 25 per cent deposit fell to 3.63 per cent in January. This was less than December?s figure of 3.92 per cent and the lowest rate recorded since comparable records began in 1997.
The two-year fixed-rate deals saw their rates fall to 3.97 per cent ? a six-year low and a significant drop from the 6.35 per cent in June 2008.
However, despite lenders wanting to attract customers, borrowers with smaller deposits have no choice but to pay much higher rates. Collating information on 95 per cent loan-to-value mortgages was ceased by the Bank of England in 2008, since there were only a few on the market, according to the Times Online.
However, despite a slim chance of seeing an abundance of 95, 100 and 125 per cent mortgages that existed before the credit crunch, there are signs that lenders are likely to lend to borrowers with smaller deposits.
The number of deals available to people who need to borrow up to 90 per cent of the value of their home jumped by 26 per cent in January. Meanwhile, Nationwide told Times Online that 30 per cent was the new minimum deposit people needed to put down to qualify for its best rates from nearly half of its mortgage products.
