Higher loan-to-value mortgages make slight return

Mortgage deals for homebuyers with smaller deposits are trickling back, with the Co-operative Bank and Britannia returning to 90% lending. Financial data firm Moneyfacts this week said the number of mortgages on offer has reached 2,076 – the highest since December 2008. It added that "a significant proportion are for those with smaller deposits". It comes as Nationwide this week revealed that house prices continue to surge , rising 1% in April, pushing the annual rate to 10.5%. Moneyfacts says there are 19 mortgage deals available to those looking to borrow 95% of the value of their property, compared with three a year ago. Meanwhile, the number of deals available to those wanting to borrow 90% has doubled over the same period – from 71 to 147. However, David Hollingworth at mortgage broker London & Country , is surprised at the suggestion that there are 19 deals available to buyers who can only stump up a 5% deposit. He thought there were not nearly as many. "I'm confident that gives a brighter picture than the reality. And even if there were 19, you'd have to say that is extremely low," he adds. Yorkshire Bank is one of the few offering a 95% mortgage: a three-year fix for first-time buyers. However, the rate – 6.99% – will put many off. Hollingworth says the 19 deals may include mortgages that are only available to a lender's existing customers. For example, Nationwide offers home loans to customers whose current deals with the society are ending, where they may be able to borrow up to 95% of the property's value. But at least the availability of deals is improving, and rates are coming down even if, as Moneyfacts says, a 25% deposit remains the benchmark for the majority of the most competitive mortgages. There was some more good news this week when the Co-operative Bank and Britannia announced they were reintroducing 90% loan-to-value (LTV) options on a range of mortgage products. These include a two-year fix at 5.49% with a £999 fee, which Hollingworth describes as a very good rate. There is also a five-year fix at 6.09% with an identical fee. These loans have to be taken out on a capital and repayment basis. The maximum property value is £350,000, and the minimum is £75,000, with a £20,000 minimum household income .