95% LTV mortgage deals fall

The number of 95% loan-to-value 2-year fixed rates have fallen from 11 in May to just six in June, moneyfacts.co.uk data found.

Meanwhile 95% LTV 5-year fixes have fallen from 11 in May to 9 in June.

Danny Belton, head of lender relationships, Legal & General Mortgage Club, said: “The disruption caused by coronavirus and the subsequent lockdown clearly affected the availability of high loan-to-value (LTV) products on the mortgage market.

“Lenders were not able to conduct physical valuations of properties during the lockdown, and many firms took responsible action to limit or temporarily withdraw higher LTV options from their propositions.

“With the housing market now back open and demand returning, we are starting to see lenders return to higher LTVs, in some instances up to 90%.

“There is a desire from lenders to move back to even higher LTVs, but 90% is likely to remain the new normal for the time being.

“In part, this is due to ongoing uncertainty around the impact of COVID-19, but more so the fact that lenders are still rightly focused on supporting existing customers and managing their operational capacity.”

First-time buyers able to double their deposit from 5% to 10% can get average rates at 0.98% lower on a 2-year fixed mortgage and 0.91% lower on a 5-year fixed deal.

In June the average rate on a 2-year fixed mortgage at a 95% LTV was 3.28%, while the average rate at 90% LTV was 2.30%.