Early Christmas present for first-time buyers | moneyfacts.co.uk
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Derin Clark

Derin Clark

Online Reporter
Published: 09/12/2019

First-time buyers got an early Christmas present at the start of December, as mortgage lenders cut fixed rates on 95% loan-to-value (LTV) mortgages.

Data from the latest Moneyfacts UK Mortgage Trends Treasury Report, soon to be published, has revealed that the average two year fixed rate at 95% LTV fell by 0.02% month-on-month, from 3.27% in November to 3.25% at the start of December. Meanwhile, the average five year fixed rate offered at this tier fell by 0.03% month-on-month, from 3.60% in November to 3.57% in December. First-time buyers able to save for a 10% deposit also benefited from rate cuts, as the average rate on two-year fixed rate 90% LTV mortgages fell by 0.04% month-on-month and the five year average decreased by 0.02% month-on-month.

Residential mortgage product analysis (by loan-to-value)

Average two year fixed rate 

Max loan-to-value 60% 75% 80% 85% 90% 95%
Nov 19 1.80% 2.31% 2.39% 2.47% 2.66% 3.27%
Dec 19 1.78% 2.30% 2.40% 2.48% 2.62% 3.25%
Difference -0.02% -0.01% 0.01% 0.01% -0.04% -0.02%

Average five year fixed rate

Max loan-to-value 60% 75% 80% 85% 90% 95%
Nov 19 2.11% 2.59% 2.73% 2.80% 2.96% 3.60%
Dec 19 2.08% 2.58% 2.73% 2.81% 2.94% 3.57%
Difference -0.03% -0.01% 0.00% 0.01% -0.02% -0.03%

Source: Moneyfacts UK Mortgage Trends Treasury Report 

Commenting on the fall in average mortgage rates, Darren Cook, finance expert at Moneyfacts, said: “First-time buyers or those borrowers seeking higher LTVs seem to have benefited the most during November, as providers appear to be once again competing for this business by driving interest rates down.

“During the latest round of competitive cuts, it appears that mortgage providers are lowering rates for those with a smaller deposit, with the average rates at 90% and 95% seeing greater reductions than their lower LTV counterparts. This follows a summer of fairly muted activity at the riskier, higher LTV tiers, following the warning issued by the CEO of the Prudential Regulation Authority in May that the Bank of England is watching mortgage rates ‘like a hawk’.

“With the average two-year fixed rate at 95% LTV falling by 0.02% over the past month and the average rate at the 90% LTV tier decreasing by 0.04%, the disparity between these rates has now widened to 0.63%. Meanwhile, the average five-year fixed rates at 95% and 90% LTV have fallen by 0.03% and 0.02% respectively during November, meaning the disparity between these average rates also stands at 0.63%.

“The difference in average rates between 90% and 95% LTV tiers has historically always been greater than differences in average rates between LTVs lower down the tier scale, so it is always worthwhile for a potential first-time buyer to try to raise an additional deposit and attempt to step down the ladder to find a deal offering a more favourable interest rate.”


Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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