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Number of 90% LTV products on the rise

Jake Carter

February 16, 2021

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The number of products available at up to 90% LTV has risen by 29 in the first two weeks of February, according to Moneyfacts.

Between the beginning of January and February, 88 products at up to 90% LTV have become available, increasing the total number to 277.

However, Moneyfacts noted that this is till far off the 776 90% LTV products that were available at the start of February 2020.

In addition, the number of lenders who offer 90% LTV mortgages overall has also increased, rising by five in February, and by 15 since the start of January.

However, the average 2-year fixed rate is currently 3.56%, which Moneyfacts outlines as close to 1% higher than it was last year.

The data also shows that the average 5-year fixed rate is 0.77% above the February 2020 rate.

Furthermore, first-time buyers with a 10% deposit will find more cashback offers on the market today, rising from 50 to 83 over the past month.

The number of lenders for this offering has also increased, rising from 12 in January to 17 so far in February.

Eleanor Williams, finance expert at Moneyfacts, said: “As the stamp duty holiday deadline approaches, RICS latest research indicates that January has seen the first fall in residential activity in seven months.

“However, first-time buyers who found themselves unable to proceed last year, and who may not be impacted by the end of the stamp duty holiday if they are purchasing below a property value of £300,000, could buck this trend, as there may be good news for those ready to take their first step on the property ladder.

“While average rates – historically often higher than those available in lower LTV brackets due to risk – are above where they were a year ago, those for whom the longer-term stability of a five-year fixed may suit their circumstances may be pleased to note this rate has reduced 0.04% since the start of this month alone.

“There are of course still hurdles for these borrowers to overcome; house prices inflated quite significantly last year – although early indications are this may be slowing in 2021 – and savings rates have continued to descend to rock bottom lows, making building a larger deposit difficult, as have high rental payments.

“But their options have been steadily increasing, and added to the news that the homebuyers using the current Help to Buy equity loan scheme have a further extension on the deadline for completions, there is hope that 2021 may see more potential home-buyers take that first step onto the property ladder.”


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