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First-time buyer rates fall sharplyMortgage rates for first-time buyers have dropped sharply and the number of products has doubled in the last three years.

Rates on the average first-time buyer mortgage have fallen by one percentage point since April 2012 to 3.26%, according to new research from MoneySuperMarket.

The number of overall mortgage products available to first time buyers is currently 2,776, up from 1,324 in April 2012, partly thanks to the Government's Help to Buy scheme.

And the number of mortgage products at 95% LTV has increased by 448% over the last three years, helping those with smaller deposits.

The average LTV for first-time buyers is now 79%, which means that those those looking to get their foot on the ladder would need to stump up a hefty deposit of £31,500 on a £150,000 property.

Spurred by Help to Buy, there are now 170 mortgage deals available to those with just a 5% deposit, against just 31 in 2012.

In addition, average rates have fallen by 1.04 percentage points to 4.72% on average.

Kevin Mountford, head of banking at MoneySuperMarket, said: "The increase in the number of first time buyer mortgages, and the corresponding fall in interest rates, can only mean good news for those looking to get a foot on the ladder.

"Even better, borrowers who can scrape together a 10% or even 15% deposit will find they are able to get their hands on more competitive deals.

"The introduction of the Government's Help to Buy ISA which will see the Government provide up to £3,000 towards a first time buyer's deposit, could also help prospective homeowners get themselves into a new LTV bracket, thus helping them secure a more competitive deal."

Mountford said that while mortgage approvals rose 7% in April, this doesn't mean that lenders' criteria is becoming more relaxed.

"After the introduction of the Mortgage Market Review, borrowers not only need to have a strong credit score, they also need to prove that they can afford the mortgage they're applying for if rates should rise in the future."


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