More than 360 different mortgages for those with just a 5 per cent deposit or equity in their home are on the market currently – the highest figure in over two years.
The 361 “95 per cent” mortgages – so-called because the loan covers 95 per cent of the cost of the home – available to homeowners and buyers is the highest since 369 were available back in May 2022, according to analysis from Moneyfacts.
A year ago, there were just 188 of these mortgages, which can help those who cannot save for a deposit to get on the property ladder, on offer from lenders.
Mortgages are also staying on the market for longer, in an indication that stability is returning to the sector after a turbulent two years.
This month, the average shelf-life of a mortgage product rose to 30 days, up from 15 days a month prior.
Getting more 5 per cent deposit mortgages on to the market was a pledge from the new Labour government during the election campaign.
Labour has announced it will introduce a “freedom to buy” pledge on guaranteeing mortgages.
It has said that first-time buyers could use the state as a guarantor for their mortgages, making permanent a government scheme that was set to expire.
The mortgage guarantee scheme was first introduced in 2021 by the Tories.
Unveiled when Rishi Sunak was chancellor, it aimed to help buyers with deposits of just 5 per cent to get on to the property ladder, by using the state as a guarantor for 95 per cent mortgages, meaning more banks would offer them.
Rachel Springall, finance expert at Moneyfacts, said: “Borrowers who have a limited deposit may be pleased to see a rise in the number of mortgages available at 95 per cent loan-to-value (LTV) this month, reaching a two-year high.
“The concerns surrounding mortgage affordability among borrowers remains and the Government will no doubt be under the spotlight to see what plans may be set in motion to support home buyers and those looking to get onto the property ladder,” she added.
The news also comes as some major lenders have started to drop their mortgage rates.
Barclays and HSBC each cut their rates for the second time in two weeks on Friday which followed Halifax lowering rates on Wednesday and Santander cutting them on Thursday.
Brokers have said that lenders are jockeying to attract business before schools break up for their summer holidays, but that rates are also likely to fall this year as the Bank of England is expected to cut interest rates, sparking new confidence in the housing market.