You are here: Home - Mortgages - First Time Buyer - News -

Mortgage rates drop to record lows for small deposit borrowers

Written by:
Interest rates available on mortgages available to borrowers with deposits of just 5% have fallen to record lows, according to research from Defaqto.

The firm pointed out that over the last year the average interest rate on a 95% loan to value (LTV) two-year fixed rate deal has dropped from 3.98% to 3.46%, while rates available on three- and five-year deals have also fallen over the same period.

The increase in competitive deals for low deposit borrowers has coincided with a jump in the number of such products in the market. Defaqto noted that there are now 290 95% LTV deals available, up by almost 50% from the 199 deals on the market 12 months ago.

There has also been an increase in the number of lenders offering these deals from 52 to 58.

Brian Brown, head of insight at Defaqto, pointed out that buying a home is a big investment, and rising prices have kept home ownership out of reach for many.

He added: “It looks like the cost of buying a home has just got a bit easier for first-time buyers as prices have finally stopped rising and mortgages are cheap.”

The results echo data from AmTrust and Moneyfacts which found 95% LTV deals were increasing in number and falling in rate.

According to the latest data from the Office for National Statistics, annual house price growth has dropped to the slowest rate seen since 2013, while E.surv has suggested the jump in mortgage approvals seen in January was driven by borrowers with small deposits.


There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Coronavirus and your finances: what help can you get in the second lockdown?

News and updates on everything to do with coronavirus and your personal finances.

The savings accounts paying the most interest

If one of your jobs this month is to get your finances in order, moving your savings to a higher paying deal i...

Everything you need to know about being furloughed

If you’ve been ‘furloughed’ by your company, here’s what it means…

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
Lower utility and fuel prices drag inflation to a two-year low

Inflation fell to a two-year low last month, as falling utility bills and fuel prices eased pressure on UK households.