Mortgage Moans

If you're looking to get your foot on the property ladder, you may want to save for a while first. The recent credit crunch in the UK has led to mortgage lenders withdrawing many of their cheaper deals in an attempt to discourage all but the most affluent from taking out a mortgage.

Only one provider in the UK now offers a 100% mortgage to the general public, while the rest are reserving this deal for professionals or imposing other restrictions. The 100% mortgage was originally introduced to help first-time buyers with no savings to get on the property ladder. Now, without substantial savings, it's unlikely buyers will be able to get a low, affordable mortgage rate.

95% mortgages are also becoming scarcer. Realistically, if you have a deposit of less than 25% of the total cost of the home you wish to buy, you may want to put off your purchase until you can save more. For example, on a house costing 180,000 you'd need a deposit of 45,000 to get a good mortgage deal. If you have high savings, an offset mortgage may be the best deal - it will subtract your savings from the total amount, leaving the overall debt slightly lower.

It's also bad news for those wishing to sell their home. Because house prices have now fallen by 2.5 - 5% across the country, many homeowners are finding themselves sliding into negative equity - their mortgage debts are more than their house would sell for. The lack of affordable mortgages available to buyers also mean that many sellers are seeing initial interest only to have buyers walk away because they cannot get the necessary funds.

It's not all bad news though. There are still deals available which will allow you to pay off your mortgage at rates you can afford, or pay extra per month. Flexibility is more common as lenders find that 'one size fits all' doesn't apply to the mortgage market. Alternatively, go for a fixed-rate deal which will guarantee payment amounts for a fixed term (usually 5 years). The most important thing is to look around. Don't sign up to the first deal you find; compare different mortgage types and find which one will suit you and your circumstances best.

Although mortgages are becoming harder to obtain, they're not impossible. Offset mortgages are ideal for those with savings, and if you have equity in your home consider a remortgage to cut payments and release cash.