Banks and building societies have really stepped up to the mark by increasing efforts to provide more low deposit mortgages. Lenders are offering rates cheaper than most of us could ever have imagined and loan-to-values are much more attractive.
It was not long ago lenders were concentrating on borrowers with big deposits but things have changed. First-time buyers, in particular, have a lot of choice and we cannot be too far off a return of 100 per cent deals.
The gap between LTV bandings seems to have tightened and raising the extra deposit to qualify for the lower rate is not as important as it used to be. It is incredible buyers are now able to secure sub-3 per cent two-year fixes with a 10 per cent deposit or a sub-4 per cent two-year rate with a 5 per cent deposit.
There are still more things lenders could do, such as supply more guarantor loans and offer split interest-only again but generally the market is in a better place.
Lenders’ increasing appetite to provide more mortgages and low funding costs is keeping rates down and helping to drive the market forward. And with inflation at zero, mixed signals from the Bank of England and European countries still struggling, it seems rates could remain low for some time yet.