'Many more mortgages available'

The number of mortgages on the market has increased by almost a fifth since a multibillion-pound scheme to kick-start lending was introduced, research has found.

But borrowers with bigger deposits have tended to see sharper increases in choice over the last half year as well as larger rate cuts than those with smaller deposits such as struggling first-time buyers, MoneySupermarket found.

The comparison website said the number of mortgages available had increased by 17% since the £80 billion Government scheme to unblock the flow of credit to households and firms was launched in August. There are now more than 2,780 mortgage deals on the market.

Since May, there has been a 46% increase in the number of mortgages for people with a 40% deposit, to reach 424 deals. The average rate on these products has tumbled by 0.48 percentage points since May to 3.43%.

People with a 20% deposit have seen a smaller increase of 20% in the number of mortgage deals over the same period, although there are a larger number of products available to them at 467.

Meanwhile, the average rate on offer for someone with a 20% deposit has fallen by 0.09 percentage points over the period to 4.01%. The number of 95% mortgages has increased by six since August - but the typical rate offered on these products has actually increased by 0.01 percentage points compared with August, to reach 5.83%.

Clare Francis, mortgage expert at MoneySupermarket, said: "There are now many more mortgages available than there were six months ago, although it is those borrowers who have the largest amount of equity in their homes who continue to benefit the most.

"That said, it is great to see that a number of lenders, including Santander and the Co-operative Bank, have launched new 90% mortgages in recent weeks and that Nationwide doubled the amount it lent to first-time buyers between March and September.

"Many lenders claim their doors are open for business but the perception has often been different, particularly for first-time buyers and those with only small amounts of equity in their homes over the past few years."

There are 258 deals at 90% on the market, showing an increase compared with August when the scheme started but still below the 274 deals there were in May. The average rate has come down slightly from 5.33% in May to 5.21%.