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High LTV choice shrinks in July – Moneyfacts

  • 13/07/2020
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High LTV choice shrinks in July – Moneyfacts
The number of 90 per cent and 95 per cent loan to value (LTV) mortgages fell further to 84 options in July, figures from Moneyfacts showed.


There were 214 high LTV products in June and 1,170 in March before the pandemic hit the property market and the UK went into lockdown. 

As of July, there are 70 products at the 90 per cent LTV tier and 14 at 95 per cent – nearing a record low for 95 per cent LTV mortgages since May 2009 when there were three on the market. 

Across all LTV tiers, fixed and variable rates, there are 2,728 mortgages on the market compared to 5,222 in March. Compared to June, this is only a slight dip on the 2,810 products which were available.  

There is just one two-year fixed 95 per cent LTV product on the market, and it has a rate of 3.94 per cent. For a longer five-year term, there are five options at 95 per cent LTV with an average rate of 3.46 per cent. 

At 90 per cent LTV, the average rate for a two-year fixed is 2.9 per cent and there are 16 deals on the market. For five-year fixes, there are 26 options with an average rate of 3.16 per cent. 

Moneyfacts data also showed that across all LTV tiers, the average rate for two-year fixes dropped to a record low of 1.99 per cent while five-year fixes sat at 2.25 per cent. 

This is likely due to the lack of high LTV offerings as for 90 per cent and 95 per cent LTVs the two-year fixed rate average increased by 0.6 per cent and 0.66 per cent respectively in July. Also, although the five-year average at 95 per cent decreased by 0.02 per cent, the five-year at 90 per cent increased by 0.59 per cent.

Eleanor Williams, spokesperson at Moneyfacts, said: Our research shows that there still remains a dearth of available products. After a minor rally last month, July saw overall product choice fall again, starting the month with 2,728 products on offer. 

The majority of the available products at this level now are specialist options. This information could be disappointing to many would-be borrowers who may not have someone to guarantee, do not work in the specified job roles, or do not reside in the relevant postcodes, especially considering that while savings rates continue to plummet, increasing their level of deposit is likely to more be difficult. 


Availability waxing and waning 

Williams added: “It seems that while lenders have the appetite to lend, intense customer demand being levelled at the small number of providers who have relaunched in these tiers is overwhelming, at a time when operational capacity is already stretched and there continues to be existing customers requiring support with payment difficulties in addition to new business underwriting.  

Therefore, until more lenders return to this space with products to support the clear borrower demand, it seems likely that we will continue to see an ebb and flow in availability. 

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