Plan To Remortgage

An third of mortgage holders plan to move or remortgage in the next 12 months, figures have shown.

However, just 33 per cent of them are confident they will be able to qualify for a loan.

The reasons for this are twofold; concerns they are not earning enough money, and concerns that they can’t raise a big enough deposit.

A smaller number believed that a poor credit rating would affect their chances of a remortgage.

The research showed that 60 per cent of those hoping to take out a mortgage have a deposit or equity stake of less than 25 per cent of their home's value.

Over 30 per cent have less than 10 per cent to put down and 13 per cent have no equity at all.

But only 17 per cent of current mortgage products are available to people with deposits of 10 per cent, and interest rates on these deals average more than five per cent.

The study by Legal and General Mortgage Club and the Association of Mortgage Intermediaries was based on responses by 2,000 people with mortgages.

Ben Thompson, of the Legal and General Mortgage Club, said: "On average, most of the 60 per cent of borrowers with less than 25 per cent deposit to put against a new mortgage will be left disappointed with the number of products available to them on the high-street.

"Lenders prefer to choose the borrowers with the highest deposits, incomes and credit scores.

"A typical applicant applying direct for a best rate product available, and for which required credit scores are extremely high, runs the risk of a refusal and damage to their credit record."

Max Erskine from remortgagenow.co said: "This research shows the level of remortgage intent, but also highlights the problems people face.

"However, the mortgage and remortgage markets are becoming better for those looking for new deals.

"Lenders are now really beginning to fight to win custom and ever day they are putting together more attractive deals.

"Advice really is important for those seeking a new mortgage and we have been able to help many people who didn’t think they would be able to find a suitable product.

"With interest rates kept down again and experts predicting that any rise will now to delayed until 2012, mortgages are likely to be cheaper for longer."