2000 available mortgages, yet I can't find one!

The number of mortgages in the market may have rocketed past 2000, but there's still a crippling lack of choice

At the height of the housing boom, buyers could choose from an astonishing 10,000-plus mortgages, all with different rates, charges, terms and criteria. There was a mortgage for everybody, including plenty of people who should never have had a mortgage in the first place.

The credit crunch changed that. In April last year, the number of mortgages hit a low of “just” 1,209. Now, though, things are looking much brighter, according to new research from Moneyfacts.

You can now choose from more than 2,053 products, up 70% from last year’s low.

Given this large number of deals, many borrowers will be asking themselves this question: If there are so many mortgages out there, why is it so difficult to get one?

There are nine million bicycles in Beijing...

That figure of more than 2,000 mortgages gives a false illusion of choice. Many are variations on a theme, for example, the same lender may have a trio of two-year fixed rate deals, each with slightly different arrangement fees. They may also have three and five-year fixes, also with different fees. So that’s nine already, and you might not qualify for (or want) any of them.

Others have strict lending criteria, sky-high rates, hefty arrangement fees, or aren’t available to anybody wanting to borrow more than 75% loan-to-value (LTV).

This is causing massive problems for first-time buyers, who often need a princely deposit just to buy a pauper’s hovel, and existing homeowners with high LTVs, who may be trapped on standard variable rates charging five or six times base rate.

Things are getting better, but only slightly.

... but just two thousand mortgages in the UK

There may be 2,000 mortgages on the market, but a paltry 13 stretch to 95% LTV. And even this is an illusion, because most are restricted to people who get financial help from their parents.

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Lloyds TSB’s first-time buyer Lend a Hand mortgage range includes a reasonably-priced three-year fix at 4.99%, with an £895 arrangement fee. You only need a 5% cash deposit, but your “helper” needs savings equal to 20% of the property’s value. It’s not a bad deal, but it looks suspiciously like a 75% mortgage to me.

Other lenders, including Bath building society, offer 95% LTV mortgages with similar restrictions. Arguably, the only pure 95% deal is a first-time buyer deal from Yorkshire Bank, a three-year fixed rate mortgage charging 6.99% with a £599 fee. Full marks for trying to help first-time buyers, but this is nearly 14 times base rate.

Nationwide does offer 95% deals, but only to existing borrowers.

• Adopt this goal: Sell your home

Better, but not a lot

You have a wider choice up to 90% LTV, with 152 mortgages on offer, up from 71 a year ago. But when you scrape away all the “me-too” and “not-you” deals, again, the choice isn’t so great.

Nationwide offers a two-year fix up to 90% LTV at 5.98%, with a £396 reservation fee and £99 booking fee. This is only available to customers who have the society’s FlexAccount as their main current account, and pay in £750 a month. And the rate is still 12 times base.

HSBC offers a lifetime variable rate at 4.99% up to 90%, with no arrangement fee. This is a good deal, but at 4.49% over base it ain’t cheap. If base rates rose to, say, 2%, it would start to look pricey at 6.49%, and if they rose even higher...

Things do start to look better at 80% LTV, where NatWest offers a tracker mortgage until May 2012 charging 2.99%, with a £999 fee.

• Watch this video: Cut the cost of your mortgage!

Equity rules OK!

What you really need right now is 25% deposit or equity. If you’ve got that, you can claim some of the best mortgage rates in history.

First Direct offers a two-year fix up to 75% LTV for just 3.29%, with a £499 booking fee and £499 arrangement fees. The One Account has a variable rate at 3.75% up to 75% LTV, with no arrangement fee

If you are borrowing just 65% of your property’s value, things get even better. First Direct offers a paltry 2.39%, with a £499 arrangement fee.

There may be more than 2,000 mortgages out there, but that figure means nothing to anybody borrowing more than 75% of their property’s value.

The good news is that rates are getting slightly more generous up to, say, 80% or even 85%, and choice should gradually expand up to 90%, but there is still a long, long way to go.

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