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Record low mortgage rates

Fixed-rate mortgages are at the lowest ever levels according to a study by Moneyfacts. Coventry building society has cut rates on its five-year fixed-rate mortgages to less than 3.5% for the first time while Northern Rock has slashed 0.9% off some of its deals and Nationwide, Skipton and Barclays have reduced their interest rates.

But only existing homeowners it seems are benefitting from the deal, with approvals for low- and middle- income customers falling.

A report by e.surv found that the typical deposit for a first-time buyer is 33 percent, in contrast to reports that loan-to-value (LTV) limits are easing.

'Despite more high LTV products entering the market, lending criteria tightened most at the lowest end of the property ladder,' e.surv said. 'The biggest squeeze on first-time buyers is in London,' it added, where 'wealthier buyers continue to represent a disproportionate share of the market.'

E.surv found that lenders were more willing to grant loan approvals for the £750,000+ house purchase market.

A spokesperson added: 'Approvals fell on all price brackets below £750,000, with lower income buyers in particular struggling to secure mortgage finance against a backdrop of tighter lending conditions.'

If you have a large amount of equity in your home, the plummeting mortgage rates are most likely to benefit you. So Coventry's five-year fix deal at 3.49 percent is only available for customers who can stump up at least 35 percent.

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