This time last year, a buyer or borrower who needed a loan for 95% of their property’s value would have only had 14 mortgages for which they could apply due to the sparse pickings lenders could offer during the pandemic.
Today, they now have the pick of 253 different deals thanks to the introduction of the government’s Mortgage Guarantee Scheme which encouraged lenders to re-introduce deals for borrowers with a 5% deposit.
Eleanor Williams, mortgage expert at Moneyfacts.co.uk, which compiled the data, said the level of choice available to those looking for a residential mortgage has risen substantially in the last month alone.
In June borrowers with a 5% deposit had 192 deals to choose from.
What’s more those with higher loans are also benefiting from rate cuts, according to Moneyfacts, as the average two and five-year fixed rate mortgages for borrowers who need to borrow 90% of their property’s value, have fallen by 0.15% and 0.08% respectively.
Those looking for a 95% loan-to-value deal, meanwhile, can benefit from average reductions of 0.09% and 0.06%, respectively.
Eleanor added: “According to the latest Halifax House Price Index, there was a 0.5% drop in property prices, likely linked to the stamp duty holiday tapering off, but this in no way detracts from the fact that overall prices are up approximately 8.8% on a yearly basis.
“Demand for the very limited supply of property could remain high, as the appetite to either get onto the property ladder or for larger properties with home offices and outdoor space continues, and these borrowers could be enticed by the possible savings lower mortgage rates may bring them.
“Competition is evident across the residential mortgage sector, but there is no guarantee that rates will continue to fall, or for how long these record-low deals may be available for, therefore seeking advice to assess the best true cost deal for their own circumstances would be a wise move by any prospective borrower.”
