First time buyers have been given a welcome boost after research revealed the number of mortgages available to borrowers with smaller deposits has started to rise.
Moneyfacts.co.uk has found that lenders have been gradually reintroducing higher loan-to-value (LTV) mortgages to the market in recent months.
The total number of mortgage deals available at 90% LTV, which require a 10% deposit, currently stands at 214, up from 144 in February last year.
Meanwhile, 560 deals are now available to those with at least a 15% deposit (85% LTV), compared with 310 a year ago.
At the same time, Moneyfacts says that the average cost of mortgage deals has been falling.
At present, the average rate on a two year fixed rate mortgage at 90% LTV stands at 6.09%, compared with 6.48% a year earlier.
For a similar deal at 75% LTV, the average rate has fallen to 4.03%, down from 4.27% in February 2010.
"Higher LTV mortgages are making a steady return to the mortgage market," said Louise Holmes, 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."
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