If you have the right amount of secured equity in your home then you will find it easy to find a great mortgage right now – proving the importance of doing all you can to increase the owning share of your home.

The number of residential mortgages available is slowly increasing, but still the market is dominated by deals for customers with more than a 25% deposit, according to Moneyfacts. It says that in April 2009 the number of mortgages available hit rock bottom at just 1,209, a 90% drop from the peak of 11,951 products available in July 2007. Today there are 1,392 products available – if you have the equity.

Lenders are very much adverse to risk right now – that means if you want a mortgage you have to prove to them that you are not a risk. Today that means having plenty of equity in your home – the smaller the mortgage they have to offer, the less they could lose and the better bet you become.

Moneyfacts says: "Lenders are slowly taking small steps back into the market, albeit with a very cautious approach. The market remains dominated by deals for those borrowers with at least a 25% deposit as lenders look to cherry pick the best customers. Borrowers with just a 10% deposit are finally seeing increased options, but they are still paying a very heavy price for their lack of equity."

The website says the best deal on offer for a borrower with just a 10% deposit is 2% higher than that available to those with a 40% deposit, adding £170 per month to the cost of a £150,000 mortgage.

So if you want a mortgage, you need to start investing in your home. Talk to a mortgage adviser about overpaying on your mortgage – by paying to much you decrease the size of your loan and immediately make yourself a better bet for another loan.

SOURCE: Moneyfacts, 14/09/09

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