The availability of high-loan-to-value (LTV) mortgages at 95% has reached its highest point in nearly five years, figures show.
According to Moneyfacts’ research, the number of deals at the high LTV of 95% has hit 388, which compares to a high of 391 in March 2020.
This has shown a steady increase since the start of the year, when high-LTV deals at 95% numbered around 366, and is also up on last year’s figure of 274.
Deals at 90% LTV have also increased, standing at 760, which is an increase from 681 this time last year.
Looking at higher LTVs, the average two-year fixed rate at the higher LTV of 95% was priced at 5.94%, and it was 5.72% for a five-year fixed rate.
At 90% LTV, the average two-year fixed rate is 5.8% and the average five-year fixed rate is 5.47%.
How the housing landscape is set to shift
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| Mortgage market analysis | ||||||
| Feb 2023 | Feb 2024 | Aug 2024 | Jan 2025 | Feb 2025 | ||
| Fixed and variable rate products | Total product count – all LTVs | 4,341 | 5,787 | 6,657 | 6,508 | 6,451 |
| Product count – 95% LTV | 149 | 274 | 353 | 366 | 388 | |
| Product count – 90% LTV | 539 | 681 | 758 | 759 | 760 | |
| Product count – 60% LTV | 606 | 640 | 755 | 780 | 741 | |
| All products | Shelf life (days) | 28 | 28 | 17 | 21 | 36 |
| All LTVs | Average two-year fixed rate | 5.44% | 5.56% | 5.77% | 5.48% | 5.52% |
| Average five-year fixed rate | 5.2% | 5.18% | 5.38% | 5.25% | 5.32% | |
| 95% LTV | Average two-year fixed rate | 5.99% | 5.84% | 6.17% | 5.86% | 5.94% |
| Average five-year fixed rate | 5.53% | 5.36% | 5.67% | 5.47% | 5.72% | |
| 90% LTV | Average two-year fixed rate | 5.66% | 5.61% | 5.98% | 5.75% | 5.8% |
| Average five-year fixed rate | 5.14% | 5.32% | 5.47% | 5.36% | 5.47% | |
| 60% LTV | Average two-year fixed rate | 5.04% | 5.06% | 5.25% | 4.96% | 4.98% |
| Average five-year fixed rate | 4.96% | 4.7% | 4.88% | 4.79% | 4.77% | |
| All LTVs | Standard variable rate (SVR) | 6.84% | 8.17% | 8.16% | 7.81% | 7.78% |
| All LTVs | Average two-year tracker rate | 4.39% | 6.15% | 5.95% | 5.47% | 5.46% |
| Data shown is as at the first available day of the month, unless stated otherwise. | ||||||
| Source: Moneyfacts Treasury Reports | ||||||
Moneyfacts said product choice has declined month-on-month, with the number of products on the market coming to 6,451. However, this is an increase on 5,787 from this time last year.
The average shelf life of a product has also improved, going from 21 days at the start of the year to around 36 days in February. This is a decrease from 28 days this time last year.
The report found that average mortgage rates on the overall two- and five-year fixed rates rose by 0.04% and 0.07% to 5.52% and 5.32% respectively, compared to the prior month.
Compared to last year, the overall average two-year fixed rate was 5.56%, while the average five-year fixed rate was 5.18%.
Moneyfacts said the margin between two- and five-year fixed rates is the lowest since January 2023 at 0.16%. However, the two-year fixed rate has been higher than the five-year equivalent since October 2022.
The average two-year tracker variable mortgage rate is 5.46%, down from 6.15% this time last year.
The average SVR came to 7.78%, down from 8.17% this time last year.
High-LTV choice ‘encouraging’ but mortgage pricing improvement will be ‘slow and steady’
Rachel Springall, finance expert at Moneyfacts, said borrowers with a small deposit will find the increased availability and choice of higher LTV deals “encouraging”.
“This is positive to see, but there is still lots of room for more deals to be pushed out in this area of the market, as it represents just 6% of all deals available to borrowers across fixed and variable mortgages.
“Despite rising choice, average rates across a two- or five-year fixed deal at 95% LTV are higher than at the start of 2025. Overall product availability across the mortgage spectrum fell, but the average shelf life of a deal rose month-on-month, which was largely expected due to the festive period, when there are typically fewer changes from lenders,” she said.
Springall noted that lenders have been “urged to do more to support first-time buyers, to boost growth in the economy”, leading to a debate around changes to lending rules.
“Therefore, there is an expectation for more products and innovation to emerge this year. However, the current rules will continue to pose a challenge for lenders to do more, as has been the case for the past 10 years, where regulatory recommendations stipulate loan-to-income ratios of 4.5 or more do not exceed 15% of a lender’s new lending.
“Until lenders see a relaxation to these rules, some will have no choice but to pose limitations on those borrowing at higher-loan-to-value tiers. Regardless of whether these rules change or not, there will be borrowers hoping to finish up their purchase before the stamp duty deadline at the end of March 2025,” she explained.
Springall said there had been a fall in swap rates over the last few weeks, but it can be a “slow and steady process for lenders to move in the same direction”.
“Borrowers may then be disheartened to know that fixed rates are not too dissimilar to what they were a year ago, with longer-term fixed rates somewhat higher. In truth, it can take a few weeks for lenders to catch up to a change in course on future rate expectations, or indeed to pass on reductions from any Bank of England base rate cuts, as the latter would be more immediately beneficial to borrowers sitting on a linked tracker rate.
“However, inflation is expected to rise in the coming months, which in turn makes it less likely for more base rate cuts. This will frustrate the millions of borrowers looking to remortgage in 2025 who plan to secure a fixed rate mortgage for peace of mind. After all, it remains the case that a fixed mortgage is much more affordable than falling onto a SVR, so borrowers about to come off a cheap deal must seek independent advice with urgency to assess the latest mortgages available to them,” she said.
