There has been an upturn in the number of 95% loan to value (LTV) mortgages on the market, boosting the range to its highest level since the financial crisis.
That is according to new figures by Moneyfacts, which has also revealed average rates on two-year fixed rate mortgages for 95% LTV products had fallen over five consecutive months to 4.02%.
The UK Mortgage Trends Treasury Report data revealed 37 new 95% LTV products had been introduced in the last month increasing the number available to 307.
It’s the first time the amount of mortgages in this LTV range had surpassed the 300 mark since April 2008, said Moneyfacts.
The finance product provider attributed this increase to the fact eight lenders had re-entered this market.
Charlotte Nelson, finance expert at Moneyfacts, explained: “Providers know that many borrowers on their mortgage books, who are coming to the end of their mortgage, may want to take advantage of the low rates on offer elsewhere.
“So, the introduction of new deals at 95% will give the providers’ mortgage book a new zest for life.”
But she warned borrowers looking for a 5% deposit not to celebrate too much about things starting to look up, because this was an ‘often-neglected’ section of the market.
She added: “Instead, the positive news should be seen as a call for action, with future base rate rises on the horizon.
“Borrowers should start considering their options now and act fast to get a good deal, to save significant sums in the long run.”
The reduction in rates for two-year fixed mortgages with 95% LTVs comes as lenders increased rates in many other areas of the market, said Moneyfacts.
But despite this, the rates had yet to recover from the all-time low they experienced in January 2017.
