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Derin Clark

Online Reporter
Published: 09/09/2019
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With the total number of 95% loan-to-value (LTV) mortgage deals falling, while those on a 90% LTV are on the rise, first-time buyers may want to wait until they can save for a 10% deposit to take advantage of the better rates.

Research from Moneyfacts UK Mortgage Trends Treasury Report reveals that the total number of products at a maximum 95% LTV have fallen by 11, from 391 deals in August 2019 to 380 this month, while the number at a maximum 90% LTV has increased by 12, from 762 products in August 2019 to 774 now.

In addition to this, the report also found that despite the five-year SWAP rate dipping below the two-year SWAP rate at the beginning of August, on a 95% LTV mortgage, the average five-year fixed rate has increased by 0.01% to 3.64% between August and September. The average rate on a 90% LTV has, in comparison, fallen by 0.05% from 3.00% to 2.95% during this same period.

This trend can be seen throughout the mortgage charts, with deals at a lower LTV tier rising and average five-year rates falling.

Residential mortgage product analysis 

LTV availability - Total products 

Max LTV 60% 75% 80% 85% 90% 95%
Aug 19 572 862 638 679 762 391
Sep 19 580 881 663 680 774 380
Difference 8 19 25 1 12 -11

Average five-year fixed rate - by LTV

Max LTV 60% 75% 80% 85% 90% 95%
Aug 19 2.23% 2.68% 2.87% 2.87% 3.00% 3.63%
Sep 19 2.18% 2.65% 2.77% 2.80% 2.95% 3.64%
Difference -0.05% -0.03% -0.10% -0.07% -0.05% 0.01%


Why a reduction in 95% LTV competition?

Back in May, the head of the Prudential Regulation Authority (PRA) warned mortgage lenders that they were being watched ‘like a hawk’ in regards to offering riskier mortgage deals. This could have resulted in providers shying away from lending to the riskier 95% LTV market and instead focusing on offering more competitive rates for the lower LTV tiers that are seen as a less risky option for lenders.

Commenting of the reduction in 95% LTV competition, Darren Cook, finance expert at, said: “It is clear that most lenders are staying away from competing at the 95% LTV tier, with many now focusing their attention on mortgage business at LTV tiers of 90% and below. As lenders perhaps opt to pass on the benefits of lower interest rate SWAPs onto the lower LTV tiers, up to and including mortgages that require a 10% deposit, this is not good news for those borrowers who can only muster up a 5% deposit.

“In fact, the gap between the average rate at the 95% and 90% LTV tiers for a five-year fixed deal is widening, with the difference between the two averages standing at 0.69% for September, up from 0.64% at the start of June, following the PRA warning. This could mean that those borrowers with a smaller 5% deposit may benefit from waiting to save until they accumulate a 10% deposit in order to secure a more favourable rate and have a greater choice of products – with double the number of mortgages on offer at the 90% LTV compared to the 95% LTV tier.”


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