As the housing and mortgage market move forward, prospective buyers have an increasing array of options to choose from.

As of March 2021, according to Moneyfacts, there are 3,532 mortgage deals available in the United Kingdom. This figure is less than the mortgage deals which were available at the start of March 2020, which then stood at 5,222.

Of course, it has been an eventful year, and a lot has changed in the mortgage market.

When you think about the virtual shutdown in the housing and mortgage markets in March 2020, there were significant fears about how these sectors would bounce back.

More mortgage options help buyers

Therefore, continual increases in mortgage products on offer is positive news. In March 2021, the number of mortgage deals with a 25% deposit rose by 60, to 716. In comparison in March 2020, there were 845 deals of this nature.

There is still a way to go to reach pre-pandemic levels, but that goal is in sight.

The opening months of 2021 has also seen a significant rise in mortgage options and offers requiring a 10% deposit. In January of this year, there were 160 options available, but as of March, this has increased to 323. Last year, there were 456 more deals, so this mortgage product range needs more recovery time, but it is moving in the right direction.

While there is a limited number of mortgage products available with a 5% deposit, this will change soon. The small deposit mortgage guarantee scheme’s announcement in the March 2021 Budget will provide more support for buyers with a modest budget.

Eleanor Williams from Moneyfacts comments: “Borrowers with varying levels of equity or deposit may be pleased to note continued improvements in product availability across the LTV (loan to value) tiers, except for 95% LTV where there are still just five specialist deals on offer.”

Eleanor concluded by saying; “However, this may soon change with the Government-backed mortgage guarantee scheme from April where, up to this point in time, first-time buyers may have felt neglected. In 2020 mortgage products for those with small deposits nosedived and saving for a bigger deposit continues to be hampered by rock-bottom savings rates, while demand remains high for the limited number of affordable properties.”

Does a 40 year mortgage appeal to you?

One new product in recent weeks has been the fixed-rate 40-year mortgage offered by Habito. For many households, the lower monthly payments associated with a 40-year mortgage will make homeownership a reality.

However, not everyone will welcome this style of mortgage. Lower monthly payments are reasonable, but when you pay the mortgage over a longer time, the amount of money you pay rises. Also, many people don’t find the idea of still paying a mortgage in 40 years to be too appealing.

Therefore, you need to review your circumstances before deciding if a mortgage of this length is of value to you.

Kevin Roberts, director, Legal & General Mortgage Club, commented: “We should always welcome genuine innovation in the mortgage market and we welcome this initiative from Habito offering a fixed rate mortgage for as long as 40 years. Not only does the launch boost product choice for consumers, but long-term mortgages also have the potential to be a viable route for many buyers to help them achieve their housing ambitions.”

Kevin Roberts continued by saying; “That said, borrowers have so far taken little interest in existing long-term fixed rate mortgages and it remains to be seen just how popular Habito’s new product will really be. Further information on Habito’s loan-to-income limits for these mortgages for example will also help to determine exactly which borrowers could benefit from these solutions. For many borrowers, a two- or five-year fixed rate mortgage may still prove to be more financially appealing in the short term and we would encourage those looking to buy or refinance to speak to an independent mortgage adviser and benefit from professional support.”

How to explore your mortgage options with The Money Hub

Call The Moneyhub Limited on 0203 725 5830 and speak to one of our highly specialised and dedicated Mortgage Advisors or you can complete an enquiry form which will allow you to schedule a call time.

DISCLAIMER: These articles are for information only and should not be construed as advice. You should always seek advice prior to taking any action.