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Published: 10/12/2018
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First-time buyers (FTBs) can often feel like they're getting the short end of the stick when it comes to mortgage rates, with high loan-to-value (LTV) deals typically far more expensive than those lower down the scale. But happily, our latest research shows that first-timers are actually coming out on top at present, as mortgage rates for those with a deposit of just 5% have hit a record low.

The data, from the latest Moneyfacts UK Mortgage Trends Treasury Report, reveals that the average mortgage rate at 95% LTV has fallen by 0.09% in the last month, down from 3.63% to 3.54%, which also marks a substantial reduction from this time a year ago (when the figure stood at 4.15%). Not only that, but the average has almost halved in the last decade, falling from 6.52% in December 2008 to today's record low.

At the same time, availability has notably improved, with there now being 304 mortgages available to those with a 5% deposit, up from 217 a year ago and an even more significant jump from the figure of just 17 in 2008. This highlights how far the market has come, with lending to low-deposit borrowers almost non-existent in the wake of the financial crisis; now, lenders are far more willing to operate in this sector, and are even more keen to help those with a slightly higher deposit of 10%, where availability has hit a record high of 656.


Max 95% LTV






Number of all fixed rate mortgage deals






Two-year fixed average mortgage rate






Max 90% LTV






Number of all fixed rate mortgage deals






Two-year fixed average mortgage rate






Source: Moneyfacts Treasury Report


"With first-time buyers being the lifeblood of the housing and mortgage market, it is encouraging to see that potential new homeowners now have a greater number of mortgage options available at the higher LTV tiers, as well as lower initial interest rates," said Darren Cook, finance expert at Moneyfacts.

"It is especially meaningful to note that the significant fall of 0.61% at 95% LTV over the past 12 months has come despite the Bank of England increasing the base rate by 0.25% in August this year. In comparison, the average two-year fixed mortgage rate at 60% LTV has increased by 0.12% year-on-year, while at 70% LTV it's risen by 0.26%, at 75% LTV it's up by 0.25% and the average at 85% LTV has risen by 0.21%."

This in itself highlights how much FTBs are benefiting at present, with competition between providers serving to improve the market for these low-deposit borrowers – and it's going in a completely different direction to the lower LTV market, which has traditionally been where the bulk of competition occurs.

"Prospective FTBs should therefore start to consider their options and make a comparison of mortgage products that may best suit their requirements, as choosing a good deal could save significant sums in the long run," concluded Darren.

What next?

Make the most of rising competition by comparing the best first-time buyer mortgage rates


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. Links to third parties on this page are paid for by the third party. You can find out more about the individual products by visiting their site. will receive a small payment if you use their services after you click through to their site. All information is subject to change without notice. Please check all terms before making any decisions. This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.

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