According to the research, borrowing on mortgages between 75 and 95% loan-to-value (LTV) is at its highest since 1995 as banks charge customers with smaller deposits a record £2,800 a year penalty to secure a home.

Someone with a deposit of 5% is typically being charged an annual rate of 5.27%. while someone with a larger deposit of 35%, deemed a lower risk, is getting better value with an average two-year rate of around 2.46%.

The report highlighted there were almost 100 extra 95% LTV products on the market compared with a year ago which includes 61 via the Help to Buy guarantee scheme.

As the higher 95% rates are charged on the full loan it leaves consumers paying a far heavier price in interest repayments for their extra borrowing above 75% LTV.

Vice president of Genworth Simon Crone said: “It has taken state intervention to spark renewed competition between lenders in the new regulatory environment.

“But with the government still grappling with austerity measures, it makes no sense to commit taxpayer funds to do a job that the private insurance sector is more than capable of continuing in partnership with the Treasury and regulators.

“Aspiring homebuyers would suffer a huge blow without the options currently available through Help to Buy. There is a long-term need to support high LTV mortgage lending but there are far better solutions than creating a long term burden on the state to do so.”

Genworth’s findings come after a warning earlier this month from The Building Societies Association to the bank of England to take ‘great care’ before wading into the mortgage market with more tools to pare back lending risk.

They warned policy-makers should be aware of the inconsistent consumer outcomes that any use of macro-prudential tools such as LTV or Debt-to-Income limits could drive.