Could the freeze on British mortgage lending be starting to thaw? It's beginning to look that way, as a number of lenders have cut their rates over the last few weeks.
In fact, not only are many banks and building societies cutting their rates, it's becoming easier to bag a competitive rate with a smaller deposit.
Has the mortgage market stabilised?David Hollingworth of mortgage brokers L&C is cautiously optimistic about the market: "In terms of new deals, I'd say greater stability in the market is breeding more competition. As house prices stabilise, lenders are starting to show more appetite to lend, so they're finally starting to compete for customers."
So does that mean there's hope for those of us with lower deposits? "Up until recently, the only competition has really only been at the low-risk end of the market with a number of lenders fighting over homebuyers with large deposits or significant equity in their property, but it's beginning to filter down and we're seeing a greater willingness to lend higher loans to value," Hollingworth added.
"The signs are definitely encouraging. We're obviously not back to boom times, but the mortgage market is better than it was a year ago."
See the top mortgage deals right now
Cuts keep comingThe mortgage rate cuts just keep on coming at the moment, although the top deals are still only for those with a large deposit.
If you have a deposit of 45% or more, Coventry Building Society has just launched a two-year fixed rate of 3.45% plus fees of £999. Its two-year fix is at 3.45%, again with fees of £999.
The market leader is a two-year fix from Principality, which is offering rates of 3.44% for mortgages of up to 65% with fees of £999.
Meanwhile, First Direct has just cut its offset two-year fixed rate from 3.64% to 3.47% and is charging lower-than-average fees of just £498. You'll need at least 45% deposit to qualify for that rate.
For people with only a small balance remaining on their mortgages, this could be a more cost effective mortgage than a lower rate that charges higher fees.
HSBC has slashed its five-year fixed rate from 4.95% to 4.73%, although only for loans of up to 60% of a property's value and with fees of £999.
Falling trackersIt's not only fixed rates that are coming down, lenders are also cutting their tracker rates. If you are happy to take a bit more risk and opt for a variable rate mortgage, you can benefit from even lower rates.
For example, HSBC is reducing its tracker rate from 2.59% to 2.49%, again for those with a 40% deposit and fees for £999.
First Direct's two-year offset tracker falls from 2.68% to 2.58%. It requires a 45% deposit and charges £999 in fees.
For a slightly smaller deposit of 30%, Santander is offering a two-year tracker that's currently at 2.59% and charges fees of £995, while Woolwich has announced a 2.89% lifetime tracker rate for people with 25% or more deposit and a £999 fee that is available from January 20."We are seeing an improvement in the mortgage market but the best rates are still reserved for those with deposits of at least 25% and, to be honest, it's likely to remain that way for the foreseeable future," said Hannah-Mercedes Skenfield, Moneysupermarket's mortgage channel manager.
"There are deals to be had for those who only have 10% to put down but they will need to shop around and be prepared to pay a premium.
"The biggest barrier to entry into the mortgage market, along with supply, remains obtaining a deposit."
Which lenders are accepting smaller deposits?There are deals out there if you only have 15-20% to put down. Coventry Building Society, for example, offers a variety of products that are available for loans up to 85% of the property's value.
Some first-time buyers could even qualify for a 90% loan. If you've banked with Coventry for three or more years, or if a parent or grandparent has, you could qualify for a 5.99% five-year fixed rate with just a 10% deposit.
The arrangement fee is just £199 and you also get £500 of Ikea vouchers to help kit out your first home.
Nationwide has also cut a wide range of fixed and tracker deals, bringing down the price of its two-year fixes for those with at least a 20% deposit.
Its no-fee, two-year fixed rate has dropped from 6.14% to 5.54%. If you're willing to pay an arrangement fee of £896 you can fix your mortgage at 5.34% - down from 5.74%. Both of these deals are available for loans up to 80% of the property's value.
Mortgages for people with a 10% depositEven 15% or 20% of a home's value is a pretty hefty deposit for many. There are mortgages available to those with just 10% to put down, although the choice remains limited.
HSBC is probably the most competitive lender for those needing to borrow 90%. You can get a lifetime tracker mortgage at 5.19% with a £999 arrangement fee and no early redemption charge at any time.
Santander also looks as though it wants to step up its competitiveness in the mortgage market. It has just launched a new two-year tracker at 4.99% which is a market-leading rate for a 90% loan over that shorter term. The fee is £995 but unlike the HSBC deal, which is penalty free, an early redemption charge will be levied if you redeem the mortgage within the first two years.
If you'd rather have the security of fixed monthly repayments, Saffron Building Society is offering a rate of 5.89%, set until the end of November 2012. The fees on that deal are £995.
Alternatively, Yorkshire Bank offers a rate of 5.99% fixed until March 31 2012, with fees of £999.
