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Now more than ever you need to maximise the equity in your property to be sure of a lower mortgage rate – so get some expert help.

It has always been the case that the lower the loan to value ratio of the mortgage, the cheaper the rate of repayment. It makes sense – the more of your house you own, the more security you have and the happier a bank or building society is to lend on that property.

So it's no surprise to hear that the latest Moneyfacts mortgage figures show that while fixed mortgage rates are falling, they are only doing so for those with significant equity.

It says the average two year fixed rate for a borrower with a 10% deposit has increased steadily since April 2009, now standing at 6.48%, the highest level since December 2008. But by comparison, the average rate for a borrower with a 25% deposit stands at 4.27%, the lowest level since July 2009.

Michelle Slade at Moneyfacts.co.uk says: "While lenders are slowly increasing the number of deals available to those with a small deposit they continue to make them pay a heavy price – on average, borrowers with a 10% deposit pay £4,728 more over two years than those with a 25% deposit."

So what can you do to maximise your equity? There are lots of ways to invest your money wisely and prudently, making sure that when it does come time to get a new loan you can get a lower LTV mortgage and a lower rate of repayment with your increased spending power.

The key is to talk to a professional mortgage adviser. They will be able to show you ways to invest, save and make the most of your finances so as to reduce your loan amount and maximise your equity.

SOURCE: Moneyfacts.co.uk, 12/02/10

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