Boost for first-time buyers as the number of low-deposit mortgages hits two-year high

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Figures from the latest Moneyfacts UK Trends Treasury Report reveal that mortgage rate availability has improved, particularly for first-time buyers with smaller deposits.

The number of rates for those with a 5% deposit rose to 361, the highest point in over two years, when there were 369 rates in May 2022. Overall, mortgage product choice rose month-on-month to 6,658 options, its highest level since February 2008, when there were 6,760 rates. 

In a positive move showing more stability in the mortgage market, the average shelf-life of a mortgage product rose to 30 days, up from 15 days a month prior. The lowest shelf-life average Moneyfacts recorded was 13 days in July 2023.

Average mortgage rates rose last month, but prices are falling again, with Nationwide for Intermediares announcing more rate reductions. Moneyfacts says the average two- and five-year fixed rates rose between June and July to 5.95% and 5.53%, respectively, with the average two-year fixed rate being 0.42% higher than the five-year equivalent. 

Moneyfacts also highlights the average two-year tracker variable mortgage remained at 5.94% while the average ‘revert to’ rate or Standard Variable Rate fell to 8.17%, just shy of the highest recorded (8.19%) during November and December 2023.

Rachel Springall, Finance Expert at Moneyfacts, said: “Overall product availability continued to rise, spreading a positive sentiment on mortgage choice for another consecutive month.

"There are over 400 different tracker mortgages on the market, and any that track the Bank of England base rate may suit those who believe that base rate will come down before the year is over.”

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The information contained within was correct at the time of publication but is subject to change.

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