According to financial information firm Moneyfacts.co.uk, the average rate for a two-year fixed mortgage at 90% LTV stands at 5.98%, 0.40% lower than a year ago.
It said that while all LTV rates have fallen compared to this time last year, it is the 90% LTV tier that has seen the biggest fall.
Over the same period, the number of deals available to borrowers with a 10% deposit increased by 41% to 229, reported the firm.
The number of lenders offering 90% LTV deals also increased from 31 in May last year to 48 today.
Michelle Slade, spokesperson for Moneyfacts.co.uk, said that increased competition in the 90% LTV tier has resulted in a large reduction in rates compared to the same time last year.
“The news will be a boost to first-time buyers who have been left with limited options in the last few years.
“Skipton Building Society has provided further help to those borrowers with just a 5% deposit as it became the first lender to offer rates lower than 6.00%, without the need for a guarantor since the peak of the credit crisis.”
She added that while the mortgage market continues to show improvements for those with smaller deposits, it still remains difficult to get products.
“Mortgage availability may be improving, but mortgage approval figures remain subdued.
“The mortgage market still has a way to go before it returns to any sort of ‘normality’.”
