Take your pick on a mortgage, if you have a 40% deposit

The number of new mortgages requiring a minimum of 40 per cent deposit has increased by 61 per cent in the last six months.

The number of mortgages requiring a 10 per cent deposit has decreased by two thirds in the last six months.

Darren Cook, Analyst at Moneyfacts.co.uk, commented: "Banks are far from predicting the end of the housing slump and are hedging their bets by increasing the number of their best mortgages to those who are fortunate to have a 40 per cent deposit.

"The average mortgage rate for a 60 per cent loan to value mortgage is currently 4.29 per cent, compared to 5.92 per cent six months ago and the availability within this tier has increased from 184 products to 297 today. If you have only a 10 per cent deposit, you will be paying an average rate of 5.98 per cent and a choice of only 71 products.

"The spread in pricing between the haves and the have-nots has doubled during the past six months as the fear of negative equity and the inability to pay continues to grow. Since November last year, a mortgage with a 40 per cent deposit is 1.63 per cent down, but a 10 per cent deposit has only become 0.74 per cent cheaper.

"With the Bank of England base rate unlikely to fall below its current level and expectations are that we should see this rate unchanged for the remainder of 2009, we will only see better mortgage rates across the board if banks regain their appetite for responsible lending and healthy competition for new business returns to the market".