Fall in availability of 5% deposit mortgages
The number of deals at 95% loan-to-value has fallen since last month to just six remaining two-fixed mortgage products and nine five-year deals, according to Moneyfacts.
The financial information provider noted that first-time buyers looking for a home with just a 5% deposit will be disappointed to find the choice of mortgage deals available to them has dropped month-on-month, despite other high loan-to-value deals coming back to the market.
But there is some good news.
Average rates for those with a 5% deposit have fallen slightly between May and June. Two-year fixes at 95% of the property’s value have dipped by 0.08 percentage points to an average 3.28%, while five-year fixes are down 0.14% to 3.48%.
Rachel Springall, finance expert at Moneyfacts.co.uk, said: “While it is encouraging to see some higher loan-to-value deals return to the market at 85% and 90% loan-to-value, it has so far been slow and steady progress. At the same time, borrowers who have only mustered a 5% deposit to get onto the property ladder will find very few fixed rate mortgage deals on the market available to them.
“Borrowers may need to wait a little longer for providers to accommodate them if they only have 5% deposit to buy their first home, as there has been no improvement to growth in choice of deals available to them over the past month, it has in fact shrunk.
“If borrowers have a bit of extra disposable income and the ability, they would be wise to raise their deposit to 10% to find a greater choice of deals for a lower cost.”