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Small deposit? No problem, as product numbers hit record high

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25/09/2017
Product numbers have surged and rates have dropped on 90% mortgages
Small deposit? No problem, as product numbers hit record high

The number of two-year fixed rate mortgage deals available to borrowers with just a 10% deposit or equity stake is at a record high level, according to Moneyfacts.

The financial information provider said that those who need to borrow up to 90% of the property’s value – usually first-time buyers or second steppers – have more choice than ever before. There are 275 deals on the market right now for those with 10% upfront, compared to just 101 five years ago.

Lower rates

There has also been a massive drop in interest rates on 90% loan-to-value mortgages since 2012, which now average 2.63% compared to 5.47% five years ago.

Charlotte Nelson, finance expert at moneyfacts.co.uk, said: “This is great news for borrowers with small deposits who have felt almost ignored by the market, as not only have rates at 90% LTV fallen to an all-time low, but the number of two-year fixed rate mortgages available has seen a 29% increase in just one year.
                
“With lending at higher LTVs now more the norm, the 90% tier has become a key target for lenders who are looking for a new avenue in which to compete and stand out from the crowd, as other parts of the market start to become saturated.
        
“The 90% LTV bracket is often considered for first-time buyers, but many borrowers who took out a 95% LTV deal a few years ago could now be starting to weigh up their options for remortgaging into this section of the market. Providers who don’t want to lose a chunk of their mortgage book therefore have to up their game by not only offering better choice but also lower rates.”
        

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