Average mortgage rates falling across the board

‘Cash is King' has been the rule for some time for those buying a property, but new analysis from moneysupermarket.com (LSE: MONY) has shown that providers are beginning to loosen the purse strings with more products now available to mortgage borrowers with lower deposits or equity in their properties.

Deals with an 85 per cent Loan to Value (LTV) have seen the biggest rise in availability since December 2009 - an increase of 22 per cent means there are now 384 products available to those with a 15 per cent deposit. Those with just a ten per cent deposit are also in luck as moneysupermarket.com's figures show there has been an increase of nearly 11 per cent since December 09 with 165 products now available.

The good news doesn't stop there. Rates across all mortgage products have begun to creep down since October last year. Rates for 80 per cent LTVs have fallen hardest, with the average rate now sitting at 4.97 per cent, 0.77 per cent lower than in October last year.

Hannah-Mercedes Skenfield, mortgages channel manager at moneysupermarket.com, said; "Lenders seem to have started 2010 with their doors open and are clearly more open to mortgage lending than they have been for some time. The increase in products available at 85 per cent and 90 per cent is particularly encouraging for first time buyers, as scraping together a large deposit is not easy, and was the reason many prospective first-time buyers deserted the market in their droves last year.

"Whilst rates are obviously lower for those with a higher cash deposit, it is encouraging to see rates starting to drop across all LTV products. Although there are only nine products available at 95 per cent LTV, the average rate has fallen by 0.71 per cent since October.  It is not all good news though; last week's announcement by Skipton Building Society increasing their standard variable rate (SVR) indicates we might see an increase in rates elsewhere in the mortgage market. This coupled with the sharp increase in inflation could lead to a reversal in this trend."

These figures do suggest that those looking for a mortgage are finding more choice, however looking back to January 2009, product availability was higher and the difference between base rate and the average loan rates for deals of 85 per cent LTV and above was lower still.