Low-Deposit Mortgage Deals Reach 17-Year High

Surge in Low-Deposit Mortgage Options

According to Moneyfacts, the number of mortgage products available at 90% and 95% loan-to-value (LTV) has risen to 1,287, marking the highest count in 17 years. Specifically, there are 442 deals at 95% LTV and 845 at 90% LTV, levels not seen since March 2008.

This increase in product availability is a response to both market demand and regulatory encouragement. The Financial Conduct Authority has urged lenders to relax overly stringent lending criteria, leading to more accessible mortgage options for those with smaller deposits.

Interest Rate Cuts Enhance Affordability

The Bank of England has implemented a series of interest rate cuts, bringing the base rate down to 4.5% as of February 2025. This monetary policy easing aims to stimulate economic growth and has a direct impact on mortgage rates.

Major lenders, including HSBC and the Co-operative Bank, have responded by reducing mortgage rates. For instance, the Co-operative Bank has cut rates on two- and three-year fixed deals by up to 0.26 percentage points for homebuyers. Such reductions make monthly repayments more manageable, especially for first-time buyers.

Implications for Cambridge Homebuyers

In Cambridge, where the average property price often exceeds national averages, these developments are particularly significant. The combination of increased low-deposit mortgage options and lower interest rates enhances affordability for prospective buyers.

For example, a first-time buyer securing a 95% LTV mortgage at a reduced interest rate could find monthly repayments more within reach, potentially turning the dream of homeownership into reality.

Future Outlook

While the current environment is favourable, potential buyers should remain vigilant. Economic indicators suggest that inflation may rise in the coming months due to factors like increased energy bills and taxes. Such changes could influence future interest rate decisions and mortgage affordability

Conclusion

The surge in low-deposit mortgage deals, coupled with recent interest rate cuts, presents a unique opportunity for first-time buyers in Cambridge. Prospective homeowners should consider exploring these options promptly, as market conditions can evolve.

For personalized advice and to navigate the current mortgage landscape, contact Hockeys Estate Agents. Our team is ready to assist you in finding the best mortgage solution tailored to your needs.