Mortgage deposit requirements ease More products available at higher LTVs

07 November 2009

mortgage papers

Variable rate mortgages can leave you vulnerable to increases in the Bank of England base rate

Since the Bank of England base rate was set at 0.5% in March 2009, the number of mortgage products available to borrowers with deposits of 15% and 10% has increased.

According to Moneyfacts, the financial data firm, the number of mortgage products requiring a minimum deposit of 15% has risen from 169 to 231, while the number of mortgages that demand a 10% has increased from 89 to 105.

The total number of mortgages on the market has grown from 1,431 to 1,564 since March.

High mortgage rates

However, while mortgage lenders seem willing to accommodate borrowers in need of mortgages at higher loan-to-value (LTV) ratios, it seems the cost of those mortgages has not decreased enough to help first time buyers.

Moneyfacts says the average two-year fixed-rate mortgage is now priced at 5.06%, up from 4.84% eight months ago.

Meanwhile, the cost of the average two-year tracker mortgage now stands at 3.76% - marginally down from 3.86% in March.

Finding a mortgage

Darren Cook, spokesperson at, said: ‘It is encouraging to see that lenders are becoming more accommodating with their deposit requirements, which should give more opportunities to first time buyers. It looks like lenders are trying to make an effort to increase their prudent appetite to lend, but we need to see more lenders trying to better each other on rates.’

Cathy Neal, property and mortgages expert at Which?, commented: ‘While this news is a promising sign for first time buyers, it is important to note that the cost of high LTV mortgages is still significantly higher than average. Homebuyers who are able to put down large deposits are still in the strongest position when it comes to hunting down a low rate.

‘It is also vital to remember that, whatever your individual circumstances, it makes sense to comprehensively compare a wide variety of mortgages before signing on the dotted line. This means taking into account any fees that may be added on top of the headline rate.’

To compare mortgages quickly and easily, check out the free Which? mortgage finder. If you’re interested in learning more about mortgages, why not take a look at our .

pound coins

Which? Money when you need it

You can follow @WhichMoney on Twitter to keep up-to-date with our Best Rates and Recommended Provider product and service reviews.

Sign up for the latest money news, best rates and recommended providers in your newsletter every Friday.

Or for money-saving tips, and news of how what's going on in the world of finance affects you, join Melanie Dowding and James Daley for the Which? Money weekly money podcast

For daily consumer news, subscribe to the Which? news RSS feed here. And to find out how we work for you on money issues, visit our personal finance campaigns pages.