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95% LTV average fixed rates at record low

Image of a Moneyfacts Mortgage Treasury Report Image of a Moneyfacts Mortgage Treasury Report Image of a Moneyfacts Mortgage Treasury Report
Eleanor Williams, Press Officer
Eleanor Williams, Press Officer / Finance Expert T: 01603 476205 E: Email Eleanor
06/12/2021

95% LTV average fixed rates at record low as mortgage choice reaches highest level since 2008

95% LTV average fixed rates at record low as mortgage choice reaches highest level since 2008

Total product choice in the residential sector has risen to its highest level in over 13 years. Data from the latest Moneyfacts UK Mortgage Trends Treasury Report shows that as availability has grown, the overall average fixed rates have continued to creep upwards this month. However, the average rates for those with smaller deposits or levels of equity have fallen, with the average two- and five-year fixed rates at a high loan-to-value (LTV) of 95% currently at record lows going back to 2011.

 

Total product choice in the residential sector has risen to its highest level in over 13 years. Data from the latest Moneyfacts UK Mortgage Trends Treasury Report shows that as availability has grown, the overall average fixed rates have continued to creep upwards this month. However, the average rates for those with smaller deposits or levels of equity have fallen, with the average two- and five-year fixed rates at a high loan-to-value (LTV) of 95% currently at record lows going back to 2011.

 

  • At 5,315, the total number of products available in the residential mortgage sector has risen to the highest on our records since March 2008 (6,192) and borrowers now have more choice than they did pre-pandemic (March 2020 – 5,222).
  • For the second consecutive month, the two- and five-year overall average fixed rates have both increased, each rising by 0.05% to 2.34% and 2.64% respectively this month. This has again been driven by further increases in the average rates in the lower LTV tiers.
  • Those with smaller deposits or levels of equity saw improvements in the extent of choice on offer to them; rising by a further 76 deals this month, the proportion of the market where products at 90% LTV and above are available rose to over 20% for the first time since March 2020.
  • Average two- and five-year fixed rates at 95% LTV fell for the eighth consecutive month. At 3.09% and 3.39% respectively, these averages are the lowest on Moneyfacts records going back to 2011.
  • At 5,315, the total number of products available in the residential mortgage sector has risen to the highest on our records since March 2008 (6,192) and borrowers now have more choice than they did pre-pandemic (March 2020 – 5,222).
  • For the second consecutive month, the two- and five-year overall average fixed rates have both increased, each rising by 0.05% to 2.34% and 2.64% respectively this month. This has again been driven by further increases in the average rates in the lower LTV tiers.
  • Those with smaller deposits or levels of equity saw improvements in the extent of choice on offer to them; rising by a further 76 deals this month, the proportion of the market where products at 90% LTV and above are available rose to over 20% for the first time since March 2020.
  • Average two- and five-year fixed rates at 95% LTV fell for the eighth consecutive month. At 3.09% and 3.39% respectively, these averages are the lowest on Moneyfacts records going back to 2011.

Mortgage market analysis

 

Dec-19

Mar-20

Dec-20

Nov-21

Dec-21

Fixed and variable rate products

Total product count - all LTVs

4,966

5,222

2,782

5,156

5,315

Product count - 95% LTV

386

391

8

316

353

Product count - 90% LTV

765

779

88

667

706

All LTVs

Average two-year fixed rate

2.44%

2.43%

2.49%

2.29%

2.34%

Average five-year fixed rate

2.74%

2.74%

2.69%

2.59%

2.64%

95% LTV

Average two-year fixed rate

3.25%

3.26%

4.44%

3.22%

3.09%

Average five-year fixed rate

3.57%

3.58%

3.97%

3.51%

3.39%

90% LTV

Average two-year fixed rate

2.62%

2.57%

3.79%

2.54%

2.51%

Average five-year fixed rate

2.94%

2.91%

3.92%

3.02%

2.95%

Data shown is as at the first available day of the month, unless stated otherwise. Source: Moneyfacts Treasury Reports

Mortgage market analysis

 

Dec-19

Mar-20

Dec-20

Nov-21

Dec-21

Fixed and variable rate products

Total product count - all LTVs

4,966

5,222

2,782

5,156

5,315

Product count - 95% LTV

386

391

8

316

353

Product count - 90% LTV

765

779

88

667

706

All LTVs

Average two-year fixed rate

2.44%

2.43%

2.49%

2.29%

2.34%

Average five-year fixed rate

2.74%

2.74%

2.69%

2.59%

2.64%

95% LTV

Average two-year fixed rate

3.25%

3.26%

4.44%

3.22%

3.09%

Average five-year fixed rate

3.57%

3.58%

3.97%

3.51%

3.39%

90% LTV

Average two-year fixed rate

2.62%

2.57%

3.79%

2.54%

2.51%

Average five-year fixed rate

2.94%

2.91%

3.92%

3.02%

2.95%

Data shown is as at the first available day of the month, unless stated otherwise. Source: Moneyfacts Treasury Reports

Eleanor Williams, Finance Expert at Moneyfacts, said:

“December sees the number of mortgage products on offer rise by 159 to reach 5,315, a level not reached since we recorded 6,192 products on offer in March 2008. Availability has now eclipsed that which was offered prior to the onset of the pandemic in March 2020 (5,222) and demonstrates a robust level of recovery in the residential sector.

“We recorded improvements in the level of choice across the majority of the LTV brackets but most markedly at 90% and 95% LTV where the number of products rose by 39 and 37 products respectively this month. While the number of options for borrowers considering deals in these brackets remains slightly below that recorded in December 2019, when compared year-on-year the improvement is clear. This is supported by the fact that the overall average LTV has reached 78.83% - which is the highest we have recorded since May 2019 (78.91%).

“Echoing the trends we noted last month, despite increases in the rates across most of the lower LTV sectors fuelling 0.05% month-on-month rises in overall average fixed rates, is the fact that at the top of the LTV spectrum average rates have dropped again. Borrowers with a 10% deposit or equity will find that, following monthly reductions of 0.03% and 0.07%, the average two- and five-year fixed rates of 2.51% and 2.95% are currently 1.28% and 0.97% lower than the equivalent rates on offer this time last year.

“It may be that, following the end of the stamp duty holiday which had kept the property market buoyant for much of 2021, providers are now focusing on enticing first-time buyer business, which has often been considered the life blood of the housing market. Indeed, those looking to secure a 95% LTV mortgage may be very pleased to note that at 3.09% and 3.39%, the average fixed rates on offer have plummeted to the lowest on our records (which go back to 2011). Due to rising house prices, mortgage affordability concerns and until recently limited product choice and higher rates, taking that first step onto the property ladder may have felt a distant possibility for many, so these positive figures may provide some hope to those who dream of owning their own home.”

Eleanor Williams, Finance Expert at Moneyfacts, said:

“December sees the number of mortgage products on offer rise by 159 to reach 5,315, a level not reached since we recorded 6,192 products on offer in March 2008. Availability has now eclipsed that which was offered prior to the onset of the pandemic in March 2020 (5,222) and demonstrates a robust level of recovery in the residential sector.

“We recorded improvements in the level of choice across the majority of the LTV brackets but most markedly at 90% and 95% LTV where the number of products rose by 39 and 37 products respectively this month. While the number of options for borrowers considering deals in these brackets remains slightly below that recorded in December 2019, when compared year-on-year the improvement is clear. This is supported by the fact that the overall average LTV has reached 78.83% - which is the highest we have recorded since May 2019 (78.91%).

“Echoing the trends we noted last month, despite increases in the rates across most of the lower LTV sectors fuelling 0.05% month-on-month rises in overall average fixed rates, is the fact that at the top of the LTV spectrum average rates have dropped again. Borrowers with a 10% deposit or equity will find that, following monthly reductions of 0.03% and 0.07%, the average two- and five-year fixed rates of 2.51% and 2.95% are currently 1.28% and 0.97% lower than the equivalent rates on offer this time last year.

“It may be that, following the end of the stamp duty holiday which had kept the property market buoyant for much of 2021, providers are now focusing on enticing first-time buyer business, which has often been considered the life blood of the housing market. Indeed, those looking to secure a 95% LTV mortgage may be very pleased to note that at 3.09% and 3.39%, the average fixed rates on offer have plummeted to the lowest on our records (which go back to 2011). Due to rising house prices, mortgage affordability concerns and until recently limited product choice and higher rates, taking that first step onto the property ladder may have felt a distant possibility for many, so these positive figures may provide some hope to those who dream of owning their own home.”

Notes to editors

Pioneering financial comparison technology for over 30 years.

Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, business banking, life, pension and investment products in the UK.

Moneyfacts is the UK's leading independent provider of finance product data. For over 30 years Moneyfacts' information has been a key driver behind personal finance product decisions.

For more information about us please see our key facts.

Broadcast

Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room with ISDN (01603 230551) and Skype (Moneyfacts).

 

Notes to editors

Pioneering financial comparison technology for over 30 years.

Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, business banking, life, pension and investment products in the UK.

Moneyfacts is the UK's leading independent provider of finance product data. For over 30 years Moneyfacts' information has been a key driver behind personal finance product decisions.

For more information about us please see our key facts.

Broadcast

Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room with ISDN (01603 230551) and Skype (Moneyfacts).

 

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Rachel Springall Press Officer / Finance Expert
Eleanor Williams Press Officer / Finance Expert