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Mortgage options for borrowers increased for the seventh consecutive month with the 95% loan-to-value (LTV) market receiving a healthy injection of deals, has revealed.

It said there were now 78 more deals for borrowers with a 5% deposit but the 90% LTV sector also experienced a boost with 41 more products being added to the mix.

The only tier where availability reduced was at 80% LTV, Moneyfacts revealed. It said this could be due to providers shifting focus and increasing the number of products launched in the higher LTV tiers.

Some rates also started looking more favourable, with Moneyfacts’ data revealing, after nine months of increases, the average overall two-year fixed rate reduced by 0.01% to 2.57%.

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However, the equivalent five-year fixed rate for all LTVs increased by 0.02% – a fifth consecutive monthly rise – to 2.79%. Moneyfacts attributed this to the steep rise in the number of traditionally higher-rated, higher LTV products now available.

What’s more, the average shelf-life of a mortgage deal increased by three days to 32, indicating that things may be calming down in the volatile residential sector, with borrowers now having a little longer to secure their chosen product.

Eleanor Williams, finance expert at Moneyfacts, said: “The sense of optimism in the mortgage sector continues, with product choice continuing its climb back towards pre-pandemic levels. After seven months of consecutive increases and 3,927 products now on offer, this represents a 53% rise year-on-year and is the highest this total has been since March 2020 (5,222).

“This positive growth compliments recent Bank of England figures, which show a boom in mortgage borrowing to levels not seen since prior to the financial crash.”

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She added: “Higher LTV products returning and rates reducing couldn’t come at a better time as house prices continue to rocket upwards, but housing supply remains an obstacle for would-be buyers and this shortfall may well continue to drive up house prices.

“Lenders have been vocal of their confidence in the mortgage market as the UK lockdown eases, which is refreshing to see after the turmoil the pandemic created for home movers and those looking to switch their deal for all walks of life.”

Mortgage market analysis (Source: Moneyfacts Treasury Reports)
Fixed and variable rate productsTotal product count – all LTVs2,5663,8423,927
Product count – 95% LTV4134112
Product count – 90% LTV100440481
Product count – 85% LTV208616625
Product count – 80% LTV430721710
Product count – 75% LTV554766769
Product count – 60% LTV522515527
All LTVsAverage two-year fixed rate2.09%2.58%2.57%
Average five-year fixed rate2.35%2.77%2.79%
All productsShelf life (days)342932
All productsFees (excluding no-fee deals)£985£1,053£1,051
Data shown is as at the first available day of the month, unless stated otherwise.
Source: Moneyfacts Treasury Reports

Source: Mortgage Finance Gazette

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