The number of 95% loan-to-value (LTV) mortgages has increased by 32 in just one month, passing the 300 mark for the first time since April 2008, according to Moneyfacts.

The financial information provider found there are now 307 mortgages available to borrowers with just a 5% deposit, compared to 275 a month ago and 253 a year ago.

Charlotte Nelson, finance expert at Moneyfacts, said: “The 95% loan-to-value (LTV) market has seen a significant boost to product numbers this month, improved by eight lenders re-entering the market.”

Rates down…but for how long?

Rates have also fallen on 95% deals – typically taken out by first-time buyers. Moneyfacts research shows that the average two-year fixed rate for a 5% deposit deal has fallen for five consecutive months, reaching 4.02%.

Despite this, they have yet to recover back to the all-time low seen in January 2017.

Plus, Nelson warned that rates are set to rise, stating “it is now not a matter of ‘if’ rates on 95% LTV products will rise, but ‘when.’

“With that in mind, borrowers looking for a 5% deposit should not celebrate too much about things starting to look up, for this is an often-neglected section of the market. Instead, the positive news should be seen as a call for action, with future base rate rises on the horizon. Borrowers should start considering their options now and act fast to get a good deal, to save significant sums in the long-run.”