Higher loan-to-value mortgages make slight return and mortgages loan

The number of mortgage deals available is on the rise, and there is good news for buyers with only a small deposit

More mortgages with higher loan-to-values are available for first-time buyers. Photograph: Scott Aiken/Rex Features

Mortgage deals for homebuyers with smaller deposits are trickling back, with the Co-operative Bank and Britannia returning to 90% lending.
Financial data firm Moneyfacts this week said the number of mortgages on offer has reached 2,076 – the highest since December 2008. It added that "a significant proportion are for those with smaller deposits". It comes as Nationwide this week revealed that house prices continue to surge, rising 1% in April, pushing the annual rate to 10.5%.
Moneyfacts says there are 19 mortgage deals available to those looking to borrow 95% of the value of their property, compared with three a year ago. Meanwhile, the number of deals available to those wanting to borrow 90% has doubled over the same period – from 71 to 147.
However, David Hollingworth at mortgage broker London & Country, is surprised at the suggestion that there are 19 deals available to buyers who can only stump up a 5% deposit. He thought there were not nearly as many. "I'm confident that gives a brighter picture than the reality. And even if there were 19, you'd have to say that is extremely low," he adds.
Yorkshire Bank is one of the few offering a 95% mortgage: a three-year fix for first-time buyers. However, the rate – 6.99% – will put many off. Hollingworth says the 19 deals may include mortgages that are only available to a lender's existing customers. For example, Nationwide offers home loans to customers whose current deals with the society are ending, where they may be able to borrow up to 95% of the property's value.
But at least the availability of deals is improving, and rates are coming down even if, as Moneyfacts says, a 25% deposit remains the benchmark for the majority of the most competitive mortgages.
There was some more good news this week when the Co-operative Bank and Britannia announced they were reintroducing 90% loan-to-value (LTV) options on a range of mortgage products. These include a two-year fix at 5.49% with a £999 fee, which Hollingworth describes as a very good rate. There is also a five-year fix at 6.09% with an identical fee.
These loans have to be taken out on a capital and repayment basis. The maximum property value is £350,000, and the minimum is £75,000, with a £20,000 minimum household income .

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