First-time buyers with a 5% deposit ready to purchase their first home are in a prime position as the average rate for a fixed rate mortgage with a 95% loan to value (LTV) is the lowest on record.

According to the latest figures from Moneyfacts.co.uk, the average two-year and five-year fixed rates mortgages at 95% LTV have reached their lowest value since Moneyfacts began recording this data in 2007.

The average two-year fixed rate has fallen a massive 0.22% from 3.95% to 3.73% in just one month, and average five-year fixed rates are down to 4.08%. While many expected rates to increase following the base rate rise, mortgage lenders are unlikely to risk negatively impacting their largest pool of new customers – first-time-buyers.

Moneyfacts figures also show a boom in the number of mortgages specifically targeted at first-time buyers. This month there are 345 mortgages at 95% LTV to choose from, a significant increase on the 120 available back in September 2016.

Lenders compete for first-time buyers

95% LTV borrowers are largely seen as the lifeblood of the market, according to Charlotte Nelson, Moneyfacts finance expert. As the market gets increasingly competitive for this customer base, lenders are working hard to position themselves as the ‘go to’ provider for first-time buyers.

95% mortgages might still be some of the most expensive on the market, but for borrowers that cannot raise a 10% deposit, it doesn’t get much better than this. While rates remain low, they are in a great position to secure a better mortgage deal than ever before.