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First-time buyers have greater mortgage choice as lenders step back into market – Moneyfacts

  • 16/02/2021
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First-time buyers have greater mortgage choice as lenders step back into market – Moneyfacts
The number of high loan to value (LTV) mortgages on the market has jumped in the first few weeks of 2021, providing first-time buyers with more choice.


Lenders added 29 new 90 per cent LTV deals in the first two weeks of February alone, according to analysis by Moneyfacts.

This follows 88 additional products coming to the market between January and February bringing the total number to 277.

It comes after lows of just 44 deals on offer in September.

As well as more products, there are more lenders in this segment, with 15 additional providers since the start of January.

There has also been a rise in cashback incentives for first-time buyers, rising from 50 to 83 over the past month, Moneyfacts said.


Rates remain high

However, levels of 90 per cent LTV mortgages are still well below pre-pandemic levels; in February 2020 there were 776 products available.

And the average two-year fixed rate of 3.56 per cent is almost one per cent above the same rate a year earlier, while the five-year fixed rate equivalent at 3.68 per cent is 0.77 per cent above the February 2020 rate.

Eleanor Williams, spokeswoman at Moneyfacts, said options for those with a 10 per cent deposit have improved greatly over recent months.

She added: “There are of course still hurdles for these borrowers to overcome; house prices inflated quite significantly last year – although early indications are this may be slowing in 2021 – and savings rates have continued to descend to rock bottom lows, making building a larger deposit difficult, as have high rental payments.

“But their options have been steadily increasing, and added to the news that the homebuyers using the current Help to Buy equity loan scheme have a further extension on the deadline for completions, there is hope that 2021 may see more potential home-buyers take that first step onto the property ladder.”


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