There were 361 mortgages available at 95% loan to value (LTV) this month, near the 369 that were on the market in May 2022, according to Moneyfacts’ UK Mortgage Trends Treasury Report.
The number of deals at this tier also rose from last month, when there were 353 available, and was higher than at the start of this year, when there were 270 options.
Compared to last year, the number of 95% LTV mortgages was up on the 188 that were available in July 2023.
There has been less movement at the 90% LTV tier, which stayed flat with 792 products on the market both in June and July. This was also slightly higher than the 733 deals on the market in January, and up on the 525 available in July last year.
For borrowers with more equity or a larger deposit, there were eight more deals at 60% LTV in July than there were in May, totalling 741 options.
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This was an improvement on the start of the year, which saw 682 mortgages at 60% LTV on the market, and higher than the 511 available a year ago.
Overall product choice rose from 6,629 in June to 6,658. This was also the highest level of product availability since February 2008, when there were 6,760 deals on the market.
Rachel Springall, finance expert at Moneyfacts, said: “Borrowers who have a limited deposit may be pleased to see a rise in the number of mortgages available at 95% LTV this month, reaching a two-year high. There are now 361 options available, the highest count since May 2022, when there were 369 deals.
“There is lots of room for growth in this area of the market, as it currently represents just 5% of all deals available to borrowers across fixed and variable mortgages. Overall product availability continued to rise, spreading a positive sentiment on mortgage choice for another consecutive month, its highest point in 16 years.”
Longer product shelf life
Borrowers also have more time to secure a deal, as the average shelf life of a mortgage extended from 15 days in June to 30 in July. This was also better than the 21-day lifespan of a mortgage in January, and the 13 days a product was available in July last year.
Fifth month of mortgage rate increases
Moneyfacts’ data showed small increases in average mortgage rates in July, with the average two-year fixed rate rising from 5.93% in May to 5.95% in July.
Meanwhile, the average five-year fixed rate increased from 5.5% to 5.53%.
Moneyfacts said that, while modest, these increases represented the fifth consecutive month that average mortgage rates went up, but they were still slightly below the pricing seen in December last year.
At 95% LTV, the average two-year fixed rate went from 6.2% to 6.26% month-on-month and the average five-year fixed rate increased from 5.73% to 5.78%.
Respectively, average two-year fixed rates increased from 6.15% to 6.18% and average five-year fixed rates rose from 5.61% to 5.64% at 90% LTV.
At 60% LTV, both the average two- and five-year fixed rates stayed flat at 5.45% and 5.06%.
The average standard variable rate (SVR) declined slightly from 8.18% to 8.17% from June to July. This was just slightly below the peak of 8.19% recorded over November and December 2023.
The average two-year tracker rate was flat at 5.94%, and slower than the 6.15% average seen in January this year.
Springall said it may be “disappointing news” for borrowers to see overall average rates had risen for the fifth month in a row.
She added: “However, one positive aspect to take away from activity during June is that the rises were modest. One notable difference month-on-month has been a return to the stability in the shelf life of a mortgage deal, which has doubled to 30 days, up from 15 days. Lenders have been repricing their deals in response to volatile swap rates, which calmed during June.
“If swap rates reach a turning point to drop then there will be an expectation for fixed mortgage rates to come down, but this may be a slow and steady process to have a huge impact on overall average rates.”
Springall said there were still concerns around mortgage affordability and eyes would be on the government to see what plans it had.
She added: “Those borrowers coming off a fixed rate deal this year will note the average SVR is above 8%, so considering a lower-rate fixed or tracker mortgage would be wise. There are over 400 different tracker mortgages on the market, and any that track the Bank of England base rate may suit those who believe that base rate will come down before the year is over.”
This article first appeared on our sister site, Mortgage Solutions, here.
