One week on from the biggest lenders revealing their Government mortgage guarantee scheme deals, Moneyfacts.co.uk looks at the options now available for borrowers with smaller deposits and why borrowers would be wise to not look solely at deals within the scheme – perhaps trying to stretch their deposit to 10% for greater choice.
Compared to the five deals available at 95% loan-to-value (LTV) earlier this year, choice for those with the smallest deposits has risen dramatically, with 78 more options appearing since the start of April, both within and outside of the mortgage guarantee scheme.
Availability at 90% LTV also improved but remains a significant way off the 779 deals (the highest number ever available at this tier on our records) that were available pre-pandemic.
The influx of new higher LTV deals has seen the average fixed rates for the top lending tiers drop since the start of this month. At 95% LTV, the average two and five-year fixed rates reduced by 0.45% and 0.15% respectively but are 0.76% and 0.59% higher than in March 2020, prior to when we saw hundreds of options at 95% LTV withdrawn. Average two and five-year fixed rates at 90% LTV are 0.60% and 0.54% lower than those on offer to borrowers with just a 5% deposit available.
Borrowers could save thousands by stretching their deposit to 10% based on average rates today, saving up to £1,486 over two years and £3,379 over five years.