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95% LTV mortgages hit post-recession high

The number of 95% LTV mortgages rose by 84% in the last year after a surge of product launches over the last 12 months.

In November there were a record 260 products available for borrowers with a deposit of 5%, up from 141 a year ago.

The average rate fell to a record low of 4.12%, and the price gap with 75% LTV products is narrowing.


But the growing product range masks a decline in lending to buyers with small deposits, according to the latest Genworth/Moneyfacts Mortgage LTV Tracker.

There are now more deals available for homebuyers with a 5% deposit than at any other time since the recession as the number of available jumped by 68 in the last three months alone.

In comparison, competition in other areas of the market has stayed relatively stable or – in some cases – even declined.

The number of 75% LTV products fell by 38 between August and November this year.

The Genworth/Moneyfacts figures also shows the average rate of a 95% LTV mortgage fell 1.15% from 5.27% in November 2014 to 4.12% last month, the lowest amount since the recession.

Yet the analysis raises concerns that higher-LTV lending is in decline, with £1.61 billion lent at 90-95% LTV in the third quarter, down 27% from the £2.20 billion in the same quarter in 2014.

This means that 95% LTV loans accounted for just 2.59% of total mortgage lending, down from 3.9% in Q3 2014.

Simon Crone, Genworth Vice President – Mortgage Insurance Europe, said:

“There is little doubt that the Help to Buy mortgage guarantee has played an important role in rejuvenating the high LTV market.

“However, beneath the surface, it remains a long way short of full health and there is a danger that what we are seeing is a temporary restoration of appetite from lenders thanks in no small measure to Government efforts.”


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