18 Dec 2018

Good news for first-time buyers as 95% mortgage rates hit record low

Good news for first-time buyers as 95% mortgage rates hit record low

First-time buyers often feel they're getting the short end of the stick financially when it comes to mortgage rates.

The high loan-to-value deals they are usually seeking are typically far more expensive than those lower down the scale.

But latest research from financial services company Moneyfacts shows that first-timers are actually coming out on top at present, as mortgage rates for those with a deposit of just 5% have hit a record low.

The average mortgage rate at 95% loan-to-value (LTV) on a two-year fix has fallen by 0.09% in the last month, down from 3.63% to 3.54%, which also marks a substantial reduction from this time a year ago when the figure stood at 4.15%.

Not only that, but the average has almost halved in the last decade – falling from 6.52% in December 2008 to today's record low.

More deals on offer

At the same time, availability has notably improved, with 304 fixed-rate mortgages now available to those with a 5% deposit, up from 217 just a year ago  and an even more significant jump from the figure of only 17 in 2008.

Moneyfacts said this highlights how far the market has come, with lending to low-deposit borrowers almost non-existent in the wake of the worldwide financial crisis.

Lenders are now far more willing to operate in this sector, and are even more keen to help those with a slightly-higher deposit of 10%, where availability has hit a record high of 656 fixed-rate deals.

This figure compares to 650 a year ago and 102 a decade ago.

Darren Cook, a finance expert at Moneyfacts, said: "With first-time buyers being the lifeblood of the housing and mortgage market, it is encouraging to see that potential new homeowners now have a greater number of mortgage options available at the higher LTV tiers, as well as lower initial interest rates."

He said: "Competition between providers is serving to improve the market for low-deposit borrowers."

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Having been around since 1981, we have an experienced and knowledgeable team of mortgage advisers you can wholeheartedly trust to give you best advice.

If you wish to speak to one of our experts about 95% mortgages, call 0333 0044 333 or click here.

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