The number of mortgages available to first-time home buyers who have smaller deposit has started to rise.
It was revealed that mortgage lenders in the UK have been reintroducing higher loan-to-value (LTV) mortgages in recent months, with the total number of mortgage deals available at 90 percent LTV, which requires a deposit of 10 percent of the property value, now stands at 214, up from 144 in February 2009.
Meanwhile, the total number of mortgages available to those with at least a 15 percent deposit now stands at 560, compared with 310 in 2010.
Additionally, the average rate for two-year fixed mortgages (90 percent LTV) now stands at 6.09 from 6.48 percent in the previous year, while the average rate for 75 percent LTV mortgages has fallen to 4.03 percent from 4.27 percent in February.
“Higher LTV mortgages are making a steady return to the mortgage market,” said Louise Holmes, a spokesperson for Moneyfacts.co.uk. “This will be welcome news to borrowers with small deposits, particularly first time buyers who have struggled to find products which meet their needs."
“Over recent months some lenders have increased their rates and expanded their number of higher LTV deals, suggesting that the market could be returning to a competitive, rather than risk-based state.”