Residential mortgage providers offering 95% LTV rises – Moneyfacts

Residential mortgage providers offering 95% LTV rises – Moneyfacts

The number of residential mortgage providers including a maximum 95% loan to value (LTV) product has increased over the past 12 months, data showed.

 

The number of providers stands at 60, rising from 53 in April 2018 and is 13 more than five years ago, according to the latest research from Moneyfacts.

In turn, this increase in 95% LTV products has forced rates down, with the average two-year fixed mortgage rate and average five-year fixed rate decreasing by 0.73% and 0.71% respectively over the same period, standing at 3.28% and 3.73%.

The number of fixed rate products stands at 338, from 246 a year ago, whilst the number of variable rate products rose to 67 from 58 in April 2018.

A spokesperson from Moneyfacts said that a decade ago borrowers who could only raise a five per cent deposit had just three products from three mortgage providers to choose from.

He added: “As more firms become willing to lend at this higher risk tier, it means that potential borrowers have a greater choice of products, incentives and service from which to choose. This can only be good news to borrowers, especially for those with a preferred provider in mind or those who require a more specific product at this tier.

“It is also no surprise that more than four-fifths or 83% of mortgages available at maximum 95% LTV are fixed rate mortgages – accounting for 338 products of the 405 currently available – as these deals enable borrowers to have the certainty of knowing their monthly repayment amount, which is perhaps of particular importance to those taking their first steps on the property ladder.

“Despite the increase in the number of providers entering the higher risk LTV tiers – and the increase in product numbers as a result – the Financial Conduct Authority introduced clear affordability measures that mortgage providers must follow in the aftermath of the financial crisis, so potential first-time buyers will still need to jump through several affordability hoops before they find themselves on the first rung of the property ladder.”

SOURCE: mortgagesolutions

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