The Team

Low Deposit Mortgages making a comeback
12/03/2018
Low Deposit Mortgages making a comeback
Moneyfacts reports the highest level of low deposit mortgages since April 2008.

In their forthcoming Moneyfacts UK Mortgage Trends Treasury Report, the Moneyfacts Group, inform us that the number of low deposit mortgages - by that we mean 95% loan to value mortgages - has risen to the highest level since the financial crash. They compare the current data against data from April 2008 and this shows that in April 2008 there were 411 95% mortgage products available. In March this year, the number of 95% mortgage products available was 307. Whilst this is clearly below the high number of low deposit mortgages available in 2008, it is a substantial increase over anything we have seen in the intervening period. The number has been steadily climbing in the course of the last 12 months or so with the figure in March 2017 being 253 products falling into this category, rising to 270 in September 2017 and, finally, breaking the 300 mark in March this year.

What is also interesting about this comparison is the interest rate charged. In the April 2008 figures, we note that the average two-year fixed rate mortgage had an interest rate payable of 6.39%. In the latest figures, we see that a two-year fixed rate mortgage in March 2018 can be obtained at an interest rate of 4.02%.

Given the combination of the increased number of low deposit mortgages and the low level of interest rates, this just might be enough to encourage more first-time buyers to come into the market.