Data from Moneyfacts UK found the average two-year fixed rate at max 95% loan-to-value (LTV) is at a record low, while the choice of all fixed rate products available at max 90% LTV is at its highest on record.

The latest figures from its Mortgage Trends Treasury Report provides an in-depth monthly review of today’s changing mortgage trends, including all the relevant facts on the UK’s residential and buy-to-let markets.

It shows that the average two-year fixed mortgage rate at max 95% LTV has fallen from 4.15% this time last year to a record low of 3.54% this month.

This significant fall of 0.61% over the past 12 months is despite the Bank of England increasing the base rate by 0.25% in August this year.

In comparison, the average two-year fixed mortgage rate at max 60% LTV has increased by 0.12% year-on-year, max 70% LTV by 0.26%, max 75% LTV by 0.25% and max 85% LTV has risen by 0.21%.

Darren Cook, finance expert at Moneyfacts UK, said: “With first-time buyers being the essential lifeblood of the housing and mortgage market, it is encouraging to see that potential new homeowners now have a greater number of mortgage options available at the higher LTV tiers, as well as lower initial interest rates in the two-year fixed sector, to choose from.”

Alongside the fall in the average rate of max 95% LTV deals, the report revealed that the number of fixed mortgage deals available at max 90% LTV has increased by 101 products during the past months, reaching a record high of 656.

The number of fixed mortgage deals available at max 95% LTV stands at 304 this month – four products less than the record of 308 available in August this year.

Cook added: “The higher LTV market looks to be showing healthy competition between providers as they vie for first-time buyers’ attention, however this seems to be moving in a completely different direction to the tiers that call on much larger deposits or require a greater portion of equity.”

He advised prospective first-time buyers to consider their options and make a comparison of mortgage products that best suit their requirements, as choosing a good deal could save significant sums in the long run.