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MORTGAGE ALERT: Rocketing number of FTB deals

MORTGAGE ALERT: Rocketing number of FTB deals

Category: Mortgages

Updated: 06/07/2015
First Published: 06/07/2015

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

It's a great time to be a homebuyer at the moment. Not only are mortgage rates falling across the board, but we've got some great news for first-time buyers – the number of mortgages available to those taking their first step onto the housing ladder has hit the highest level since 2007!

Our research shows that there are now a total of 723 mortgages available at 90% and 95% loan-to-value (LTV), prime first-time buyer (FTB) stock. Notably, this marks a 73% increase on the number of such deals available five years ago, when buyers with small deposits only had a choice of 194 products.

Add to that the fact that mortgage rates for FTBs have never been lower, and you're on to a winner! Average rates for 95% LTV deals have plummeted to the lowest on record, with the average two-year fixed rate for such deals now standing at 4.47%. Just for a bit of context, five years ago the average rate stood at 6.66%, and it was still at 5.36% a year ago, which goes to show how quickly things have changed.

Competition is seriously fierce, and surprisingly, it isn't all down to Help to Buy (H2B). It's clearly been a catalyst – there were a total of 437 90% and 95% LTV deals available before the scheme was launched – but not all of the new deals available are offered by H2B participants. Rather, it's encouraged other banks and building societies to get in on the act, said Charlotte Nelson, finance expert at Moneyfacts, and this growing level of competition is set to remain.

"The boost in numbers and the lower rates suggest that lenders are finally recognising the importance of first-time buyers, who have often been considered the life-blood of the housing market," said Ms Nelson. "As a result, borrowers need to try not to be swayed by the H2B scheme as the potential to find a better deal elsewhere is high. Many providers have now thrown down the gauntlet by not only offering a competitive rate but a great all-round package, which will help to lower the overall cost of the mortgage."

Given the positive state of the market, it's no wonder that so many first timers are getting in on the action, so is it time you joined them? You still need to make sure you can afford things, of course – as Charlotte points out, "only borrowers with a squeaky clean credit history and enough savings will be able to make the first step onto the housing ladder" – but with so many low-rate deals available, it could be time to check out what's on offer.

Disclaimer: 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.