Discount mortgages 'in decline'

Posted: 08 Jul 2010 11:52:55 GMT

Mortgage lenders are dropping the number of discount deals they are offering to homeowners and those looking to purchase property.

Figures from analysis firm Defaqto show that the availability of discount mortgages in the UK has fallen by 72 per cent in the past three years, with only 166 currently on the market, compared to 586 in July 2007.

This is contrasted by the popularity of fixed-rate and tracker mortgages among lenders, which have seen boosts of 33 per cent and 36 per cent respectively over the past 36 months.

David Black, banking specialist at Defaqto, said: "Lenders with competitive standard variable rates have little incentive to offer discounted mortgages because profit margins on their fixed and base rate tracker mortgages are better."

The Bank of England recently predicted that the availability of secured credit supplied by financial service providers could tighten, which may be bad news for those seeking to get a mortgage.


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