Mortgage demand increases

The number of people looking to access the best mortgage rates has increased but the number of approvals has fallen in recent months.

According to the British Bankers' Association, the number of mortgage approvals in 2010 totalled 400,000, which is a ten per cent decrease on the figures from 2009, even though more people want to obtain a mortgage.

However, Catherine Hearnden, director at MyMortgageDirect, said that the fall in approvals was a reflection of the strict lending conditions rather than any decrease in consumer demand.

"It was the number of approvals that fell and it wasn't because the quality of the applicants was any lower; it was because of the inflexibility being shown by the lenders," she stated.

Consumers looking to take out a mortgage should not be put off as they can choose from a variable mortgage, where the interest rate changes depending on the Bank of England base rate, or a fixed-rate one where the repayments stay the same.

Both HSBC and Santander have recently reduced their mortgage rates in a bid to attract new consumers.
 

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2011-01-28 11:14:59 © Moneyextra.com