Majority Of Homeowners 'Have Mortgage Fears'

Only a third of homeowners wanting to move or remortgage are confident they would be able to during the coming 12 months, a survey has suggested.

The other two-thirds of respondents say they are worried they would fall foul of banks' tough lending criteria on mortgages.

Research by broker Legal & General Mortgage Club and the Association of Mortgage Intermediaries showed 30% of the UK's mortgage holders plan to move or remortgage during the coming year.

But just a third of these people are confident they would qualify for a new loan, with 25% concerned they do not earn enough to borrow the amount they want, while 20% think they do not have a big enough deposit.

A further 10% said they thought bad credit issues would stop them from getting a loan, including 3% who had defaulted on non-secured debt and 2% who had fallen behind with their mortgage during the past year.

The study also found that 60% of people looking to take out a mortgage have a deposit or equity stake of less than 25% of their home's value, while 34% have less than 10% to put down and 13% have no equity at all.

But only 17% of current best-buy mortgage products are available to people with deposits of 10%, and interest rates on these deals average more than 5%.

Ben Thompson, managing director of Legal & General Mortgage Club, said: "On average, most of the 60% of borrowers with less than 25% 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."

The survey, carried out by YouGov, questioned 2,000 people with mortgages.