News
Discount mortgages fall by 72%
David Black, Banking Specialist, Defaqto
While there are now 33% more fixed rate mortgages and 36% more tracker mortgages available than there were three years ago, the number of discounted rate mortgage products available has fallen by an astonishing 72%.
There are significant differences in the Standard Variable Rates (SVR) being charged by lenders and given that discounted mortgages tend to be linked to the SVR this is a key reason for their decline in popularity. Lenders with competitive SVRs have little incentive to offer discounted mortgages because profit margins on their fixed and base rate tracker mortgages are better.
Current SVR facts:
- Average SVR is currently 4.77%
- Lowest SVR is 2.50%
- Highest SVR (from a mainstream lender) is 6.08%.
Number of prime residential mortgages available:
| Mortgage type | July 2007 | Jan 2008 | July 2008 | Jan 2009 | July 2009 | Jan 2010 | July 2010 | % available in July 2010 compared to July 2007 |
| Discounted | 586 | 365 | 128 | 94 | 121 | 156 | 166 | -72% |
| Fixed | 1,426 | 1,492 | 910 | 996 | 1,032 | 1,352 | 1,890 | +33% |
| Tracker | 601 | 671 | 537 | 190 | 291 | 541 | 816 | +36% |
