Average fixed rates on 90 per cent LTV products have fallen this month as lenders continue to expand their high value mortgage offering.
Data from comparison site Moneyfacts shows the average two-year fixed rate fell from 3.65 per cent to 3.56 per cent, while the equivalent five-year rate fell by 0.11 percentage points to 3.68 per cent.
Both rates remained higher than at the start of February last year however, when the average two- and five-year fixed rates stood at 2.58 per cent and 2.91 per cent respectively.
The number of 90 per cent LTV products was also up, having increased from 160 at the start of January to 277 last week (February 12).
Aaron Strutt, product and communications director at Trinity Financial, said: “It is great to have more of the lenders offering 10 per cent deposit mortgages again and there is clearly more competition in the low deposit market.
“Many of the 10 per cent deposit mortgages are a lot more expensive than they were a year ago and some borrowers feel they are paying a premium for these rates.
“We are still speaking to a lot of first-time buyers who are keen to get on the property ladder and explain to them they will need a 15 per cent deposit to get more competitively priced rates.”
Lenders repricing
Some lenders recently repriced their products.
The Nottingham for instance added a 90 per cent LTV three-year fixed rate of 3.40 per cent, available for purchase and remortgage after returning to the 90 per cent LTV market last month.
Ipswich Building Society launched a five-year fixed rate of 3.45 per cent at 90 per cent LTV, as well as reducing the rates on two of its existing 90 per cent products.
Its two-year discount product has been repriced from 3.50 per cent to 2.99 per cent, while its two-year fixed rate has been cut from 3.75 per cent to 3.25 per cent.
Richard Norrington, chief executive officer at Ipswich Building Society, said: “The popularity of our current two 90 per cent LTV mortgage deals made it very clear that there’s a real need in the market to serve those applicants looking to purchase with a smaller deposit.
“Repricing these products makes them accessible to even more people, allowing us to address the industry’s pent-up demand, as well as allow more people to acquire their dream home.”
90 per cent LTV Mortgage Analysis
| Feb-20 | Jan-21 | Feb-21 | 12-Feb-21 | |
|---|---|---|---|---|
| Number of lenders | 71 | 32 | 42 | 47 |
| Product count | 776 | 160 | 248 | 277 |
| Average two-year fixed rate | 2.58% | 3.65% | 3.56% | 3.56% |
| Average five-year fixed rate | 2.91% | 3.79% | 3.72% | 3.68% |
| Data shown is at the first available day of the month, unless otherwise stated. Source: Moneyfacts.co.uk | ||||
chloe.cheung@ft.com
What do you think about the issues raised by this story? Email us on FTAletters@ft.com to let us know.
