Good news for first-time buyers as 95% mortgages make a comeback

Good news for first-time buyers seeking the best possible mortgage deal.

The number of mortgages at 95% loan-to-value has increased substantially.

Financial services company Moneyfacts says borrowers can now choose from over 300 products for the first time since April 2008.

Unusually, the number of 95% loan-to-value (LTV) mortgages has grown by 37 in just one month.

Lenders re-enter market

Charlotte Nelson, a finance expert at Moneyfacts, attributes this partly to eight lenders re-entering the market.

She added: "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.

"As a result, providers need to stay competitive to keep first-time buyers interested. And first-time buyers can take advantage of this competition, so everybody benefits."

Fixed rates

It's not just choice that's more competitive, as the average two-year fixed rate is still much lower than that seen at the start of the worldwide financial crisis.

Charlotte said that the average two-year fixed rate for a 95% LTV mortgage has fallen for five consecutive months to reach 4.02%.

While this average is still above the record low seen in January 2017, if you've only got a 5% deposit to buy your first home it may still be a good time to take a step onto the property ladder.

Charlotte said: "Positive mortgage news should be seen as a call to 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."

Speak to an advisor

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