Small lenders have better deals on mortgages

The credit crunch has affected the mortgage market greatly in the last few months and it is now becoming apparent that small lenders are offering much more competitive rates.

Research carried out by Moneyfacts.co.uk has shown that larger institutions are no longer able to offer consumers the best deal.

This turnaround would appear to be due to the drying up of the money markets, which no longer allows banks and other large lenders to offer such inexpensive products.

Louise Cuming, head of mortgage services at moneysupermarket.com, said: "What you’re seeing now from a best buy point of view is some of the smaller building societies having the best deals. That’s extensively because of the way building societies are able to fund what they’re offering."

According to the research carried out by Moneyfacts.co.uk, of the top 250 mortgages in the UK today only 27 per cent are being offered by the top ten lenders.

The research also showed that there had been a 60 per cent reduction in the number of mortgages available now compared to this time last year.

Mortgages News posted on 28/03/2008 15:15:43