Ye Linfeng, a researcher with Cnbenefit, said that China's smaller banks, which typically started issuing wealth-management products later than the major banks, are trying to bolster their fee income out of concern that the central bank's efforts to liberalize interest rates will increasingly eat into the fixed margin between deposit and lending rates they have traditionally relied on to turn a profit.

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There are now 80 different mortgages available for those offering a 5% deposit, including just 56 fixed-rate deals, down from 1, 079 in July last year.

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"Borrowers now need a 25% deposit to access virtually all its fixed and tracker products, " said Aaron Strutt of mortgage brokers Chase de Vere.

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Returns on these investments vary fairly widely based on whether they're subject to early withdrawal penalties, offer fixed or variable yields, or are protected by deposit insurance.

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Investors seem to be heading for the mattress and safety deposit boxes, avoiding even the dollar and euro fixed income.

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According to the financial information service Moneyfacts, the average cost of a two-year fixed-rate loan, for someone with a 25% deposit, is currently 4.28%.

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However, customers who need to borrow less than 75% by putting down a bigger deposit are being offered cheaper deals on tracker and fixed-rate mortgages.

BBC: Small rebound in mortgage lending