The average two-year fixed rate deal was priced at 2.57 per cent today, up from 2.06 per cent a year ago on 14 May.
Today’s rate was higher by 0.02 percentage points compared to 14 April last month, when it was 2.55 per cent.
The increase in average pricing on two-year fixed products reflects the return of higher-priced, higher-LTV lending. In May, 112 two-year deals were available at 95 per cent LTV, up from 34 in April.
At 90 per cent LTV, the number was 481 for this month, a rise on 440 in April 2021.
By comparison, product availability at higher LTVs dropped off a cliff last year. At 95 per cent LTV, the market offered 41 products, and at 90 per cent, 100 deals last May.
Eleanor Williams, finance expert at Moneyfacts, said: “Last year, particularly at the high-LTV end of the market, availability dropped dramatically, with the number of deals at 95 per cent LTV falling from 391 on 1 March to 14 on 1 June 2020.
“As the market contracted and higher LTV products evaporated, the average rate on a two-year fixed fell as low as 1.9784 per cent as of 25 June last year — the lowest since Moneyfacts began tracking prices in 2007.
“It has been such an unprecedented period and the mortgage market has coped remarkably resiliently,” Williams added.
“We’re not yet back to the same levels as early March 2020, but those higher LTVs are starting to return and it gives confidence to borrowers, particularly those with smaller deposits,” she said.
Overall, the market has seen seven consecutive months of growing product availability, and with a continued low rate environment, Williams said there was “a continuing sense of optimism.”