Aldermore is the latest provider to cut rates on its higher loan to value mortgages, aimed specifically at the first-time buyer market.
Its two-year fix (at 95 per cent LTV) has been cut from 4.78 per cent to 4.58 per cent. The maximum loan on this deal is £400,000.
These figures come as the latest Nationwide house price index shows an increase in first-time buyer transactions, despite market activity remaining subdued as a whole.
Natiownide says this has been driven by competitive mortgage rates, particularly at higher LTVs, coupled with low interest rates and schemes like Help to Buy.
Earlier this week Nationwide Building Society cut selected fixed-rate and trackers deals at 95 per cent LTV. It also increased the maximum loan size from £300,000 to £350,000 at this rate.
Meanwhile, Kensington Mortgages last month became the latest specialist lender to introduce a new 95 per cent LTV mortgage for residential borrowers
According to Moneyfacts, figures show that the average mortgage rate at 95 per cent LTV is now the lowest on record. In September the average two-year fix at 95 per cent LTV stood at 3.73 per cent.
Aldermore’s director of mortgages Damian Thompson says: “Our latest first-time buyer Index shows that raising a deposit remains the biggest barrier to those looking to purchase their first home.
“Many in the UK are in a position where they are able to afford mortgage repayments but are being frustrated by the struggle to raise a substantial deposit, so we want to continue to open up options for them to turn home ownership into a reality.”