First Time Buyer
More than 1,000 low deposit mortgage deals pulled in just six months
Only 79 mortgages are now on offer to borrowers with smaller deposits, compared to 1,184 deals which were available before the pandemic hit the property market in March.
The number is down from 98 high LTV products last month and compared to September last year, it’s a reduction from 1,172 deals.
Additionally, a 16-year high in house price growth, which means larger deposits are needed to get onto the property ladder, has heaped pressure on those who meet minimum thresholds because suitable mortgages are now more expensive.
The average rate for a two-year fixed mortgage at 90% LTV mortgage is now 3.54%, up from 2.64% last September.
For a two-year fixed at 95% LTV, the average rate has gone up by 1.25% to 4.48%.
A five-year fixed 90% LTV mortgage has an average rate of 3.76%, while a five-year fixed 95% LTV deal is 4.02%.
Compared to September last year, these are rises of 0.81% and 0.38% respectively.
Rachel Springall, spokesperson at Moneyfacts.co.uk, said: “As we have seen over the past six months, lenders have pulled many higher LTV deals, with some institutions leaving these sectors entirely, largely because of the high level of demand they are experiencing due to the coronavirus pandemic.
“Until matters settle, there is no clear sign of when these deals will return to the market, and with 1,108 fewer deals available than six months ago at 90% LTV and above, it is clear to see how much choice has reduced for potential first-time buyers.”
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