This is according to Moneyfacts.co.uk, which has revealed how a barrage of new mortgage options for borrowers with 5% deposits has given people a much greater range of choice over the last month.
In fact, there were now 112 mortgages for people who wanted to borrow 95% of their property’s value – this is 78 more than the 34 available in March.
It’s also a far cry from the 41 deals on the market last May when the Covid lockdown was still in place. Gradually, after this time, more lenders pulled options for people with 5% or even 10% deposits leaving the market sparse in this area.
Thanks to the Mortgage Guarantee Scheme, large high street banks are now offering 95% deals backed by the government and other lenders have – buoyed by confidence – introduced their own versions.
It’s not just in the 95% market where numbers are climbing. Moneyfacts reported the 90% LTV sector also experienced a boost with 41 more products being added to the mix. There are now 481 mortgages for people with a 10% deposit.
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.”
Low rates and high house prices
Whilst options are returning, borrowers are also benefiting from favourable rates. Williams explained we were in a relatively low interest rate environment. Indeed the Bank of England base rate is still at its 0.1% low.
She explained with rate reductions evident across many product brackets over the last month there were some extremely competitive products on the market for eligible borrowers.
“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.
“It is positive to see mortgage fees and the chance to secure a new deal remain stable for prospective mortgage borrowers. There has been a reduction to the average fee charged (excluding no-fee deals) compared to last month and a three-day increase on the average shelf-life of a mortgage overall, which means that borrowers have around a month to secure their chosen product.
!As always borrowers would be wise to seek advice if they are looking for a mortgage, not only to navigate the boom in choice, but also to ensure they get guidance on eligibility criteria and support to secure the best option for their circumstances.”
