The number of low deposit mortgage choices on the market has reached its highest level in 17-years, research from Moneyfacts has revealed.
The Moneyfacts UK Mortgage Trends Treasury Report, found that the combined choice of higher loan-to-value mortgages, 90 per cent and 95 per cent LTV, rose to 1,360 in September.
This represents the highest level since March 2008, when higher LTV product choice stood at 1,532.
Moneyfacts finance expert, Rachel Springall, said: “Borrowers with a limited deposit or equity of just 5 per cent or 10 per cent will find the choice of higher LTV deals has risen to its highest point in 17 years.
“However, it is worth noting that these deals represent just 19 per cent of the market overall, up slightly from 17 per cent a year ago, while product choice as a whole for residential mortgages has expanded to its highest count since October 2007.
“The government has been adamant that they want lenders to do more to boost UK growth, so a rise in mortgage choice is positive.
“However, it may be a bit too soon to celebrate, as affordability remains a critical hurdle for buyers, and those who want to secure their repayments for the next five years will find higher LTVs are only dropping by minuscule margins.”
Additionally, Moneyfacts provided insight into the average mortgage rates, reporting that both the average two-year and five-year fixed rate fell slightly from August to September.
It detailed that the average two-year fixed rate fell to 4.96 per cent in September from 5.01 per cent in August.
Similarly, the average five-year fixed rate slipped from 5.01 per cent to 5 per cent.
The last time that the average two-year rate was lower than this was in September 2022 when it stood at 4.24 per cent, while, for the average five-year, it was May 2023, when it was 4.97 per cent.
Springall attributed this drop to the unsteadiness of swap rates.
“Overall, the drop of just 0.04 per cent to the Moneyfacts Average Mortgage Rate during August does not bode well for borrowers who were hoping for a rate war, but it is worth pointing out that economic unrest typically leads to rising swap rates,” she added.
Finally, Moneyfacts revealed that total product count rose over September, rising from 6,842 in August to 7,062.
tom.dunstan@ft.com
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