95% mortgages make an impact - even before government initiative

The latest Moneyfacts monitor of the mortgage market suggests a significant number of new 95 per cent products - even without the government’s mortgage guarantee.

Moneyfacts says overall mortgage availability rose is at its highest since March 2020 - a total of 3,842. Product choice has now recovered to 74 per cent of its pre-pandemic level. 

The most significant increases were in the higher Loan To Value tiers, with a further 117 deals becoming available at 90 per cent LTV, and 95 per cent LTV product numbers rising by 29 to 34 - the first increase in this bracket since August 2020.

Moneyfacts finance expert Eleanor Williams says: “Mortgage availability has improved for the sixth consecutive month, and for a third month the increase has been of more than 300 products. There are now 3,842 deals available, with growth in product choice recorded across the LTV tiers great news for prospective borrowers with all levels of equity or deposit, and indicates that lenders have continued confidence in the resilience of the sector as a whole.

“A further indication of confidence is the return of standard 95 per cent mortgage products to the market … Pre-empting the launch of the government’s mortgage guarantee scheme on April 19, a number of providers have already returned these deals to their ranges, with more set to join the ranks in the coming weeks. 

“The recent Halifax Buying vs Renting Review revealed that first-time buyers are now £800 per month better off than those renting, so a growth in product choice may bring joy to many beleaguered first-time buyers who had not been able to stretch their deposit beyond five per cent.”

However, she warns the average fee charged on a mortgage - excluding those fee-free products - has risen £15 in the past month to £1,053, which is the highest Moneyfacts has recorded since November 2012. 

“This could imply that while lenders are working to attract borrowers with lower rates, they are looking to gain margins in other ways” says Williams.