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Small deposit product numbers hit record high

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Written by: Christina Hoghton
25/09/2017
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, research reveals.

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, according to financial information site, Moneyfacts.

There are 275 deals on the market right now for those with 10% upfront, compared to just 101 five years ago.

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, 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 that 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 that 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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