Small deposits are a 'costly option'

Mortgages available to would-be buyers are much more expensive and far less common, according to one industry expert.

As lenders focus on low-risk customers, the number of homeowner loan products available to borrowers with less than a ten per cent deposit has dropped from 74.2 per cent to 29.2 per cent, according to Darren Cook at Moneyfacts.

Mr Cook said: "If increases from these lenders were attributed to the money markets then we would have seen increases across the board, but as yet the 75 per cent loan-to-value (LTV) products have been left untouched."

He added that 75 per cent LTV was the benchmark of conservative lending.

Meanwhile, according to Fool.co.uk, attractive mortgages are about to be taken off the shelves as the inter-bank lending rate starts to rise.

The financial advice website states anyone coming to the end of a fixed-rate deal should apply for a new one immediately.

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