The spring home loans deals

Lenders are cutting mortgage rates and increasing product choice as the spring home-buying season gets under way. In some cases, new fixed rates have been reduced by 0.5 per cent, while the number of mortgage deals available for borrowers with a 15 per cent deposit has doubled since last spring.

The Post Office has now cut fixed rates for the fourth time this year, to as low as 3.15 per cent for two-year deals. Woolwich has cut fixed and tracker rates, with lifetime trackers starting at just 2.49 per cent. And Nationwide has reduced a range of loans by up to 0.59 per cent. Yet most reductions are on deals where borrowers have deposits or equity of about 30 per cent of their property’s value.

It’s all about deposits, right?

The new stamp duty holiday on homes up to £250,000 is good news for first-time buyers, but in London they still need to find a chunky deposit. Since the credit crisis, only a handful of lenders offer mortgages for more than 90 per cent of a property’s value.

And the Bank of Mum and Dad?

Eight out of 10 first-timers get help from parents, according to a recent study. But instead of parents handing over cash to their offspring, deals such as LloydTSB’s Lend A Hand scheme can make sense. The child finds a five per cent deposit and their parents put a further 20 per cent in a LloydsTSB savings account, paying a fixed rate of 4.1 per cent. The bank then lends at the lower rates it would charge on a 75 per cent mortgage.