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Date: Friday 22 Aug 2008

LONDON (ShareCast) - There’s good news for those looking for a new mortgage as research from price comparison website Moneyfacts has revealed mortgage rates are back where they were a year ago.

The average two-year fixed rate loan has dropped back to 6.59% from a high of 7.08% earlier this year and just a fraction above last August’s level.

But borrowers are having to find much larger deposits and hand over more in fees to get the best deals, something that is continuing to deter many potential first time buyers. The average mortgage arrangement fee is now £964, up from £803 a year ago.

"The pricing is getting back to where we were a year ago, but the appetite for lending is diminished," said Moneyfacts spokesperson Darren Cook.

He said few first timers are likely to jump with the chance that house prices may be lower in six months time. "Affordability plays its part, but the desire to wait and see how low prices will go is another important factor."

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