Remortgage market scores only with lucky 60

Homeowners remortgaging need to own 40 per cent of the equity in their home to access most mortgage deals.

Research by Fool.co.uk shows there are 4,588 mortgage products on the market offering loan-to-value of less than 60 per cent.

Those wanting to borrow half the value of their home have 4,620 products to choose from.

First-time buyers, however, are particularly stricken as there are only 74 products with 95 per cent LTV or above.

There are just 466 mortgage deals for homeowners with ten per cent equity in their property and planning to remortgage.

On average UK homeowners who brought before July 2002 with an interest-only mortgage will own 40 per cent of the equity in their home – taking into account rises in property prices.

David Kuo, head of personal finance at Fool, said: “If proof was ever needed that banks like to lend money to people who need it least, then this is it.

“But you don’t have to rely on rising property prices to shrink the loan-to-value. There are other ways, such as increasing your monthly mortgage repayments, which will also reduce the size of your loan compared to the value of the property.

“Alternatively, homeowners may want consider exploiting weakness in the property market to upsize, especially if the amount of equity in their homes will allow them to access mortgage products that others can’t."

He added: “Rising property values has made it easy for many homeowners to seemingly make money out of thin air. Some may argue that those who bought their homes early were just lucky.

"But when it comes to mortgages, the harder you work at paying off the loan, the luckier you will get.”