The availability of deals at 95% loan-to-value (LTV) has reached its highest level in over two years, data from the Moneyfacts UK Mortgage Trends Treasury Report has revealed.
The report also highlighted the fifth consecutive month of rate increases for 2- and 5-year fixed mortgage rates.
The number of mortgage deals available at the 95% LTV tier rose to 361, the highest since May 2022 when 369 deals were on offer.
This increase was part of a broader trend of rising product choice, with the total number of options available reaching 6,658, the highest since February 2008 when 6,760 options were available.
The average shelf-life of a mortgage product has also increased, now standing at 30 days, up from 15 days a month prior.
This was a significant change from the record low of 13 days in July 2023.
Rate increases for 2- and 5-year fixed mortgage deals have been modest, with rises of 0.02% and 0.03% respectively.
Despite these increases, rates remained slightly lower than those recorded in December 2023.
The average 2-year fixed rate has seen a slight rise compared to January 2024.
From the start of June to the start of July, the overall average 2-year fixed rate rose to 5.95%, while the 5-year fixed rate increased to 5.53%.
Notably, the average 2-year fixed rate was 0.42% higher than its 5-year equivalent.
The average rate for 2-year tracker variable mortgages remained steady at 5.94%.
Meanwhile, the average ‘revert to’ rate, also known as the Standard Variable Rate (SVR), fell to 8.17%, slightly below the highest recorded rate of 8.19% seen in November and December 2023.
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% loan-to-value this month, reaching a 2-year high.
“There are now 361 options available, the highest count since May 2022, when there were 369 deals.
“There is lots of room for growth in this area of the market, as it currently represents just 5% of all deals available to borrowers across fixed and variable mortgages.
“Overall product availability continued to rise, spreading a positive sentiment on mortgage choice for another consecutive month, its highest point in 16 years.”
She added: “The overall average 2- and 5-year fixed mortgage rates rose for a fifth consecutive month may come as disappointing news to borrowers.
“However, one positive aspect to take away from activity during June is that the rises were modest.
“One notable difference month-on-month has been a return to the stability in the shelf life of a mortgage deal, which has doubled to 30 days, up from 15 days.
“Lenders have been repricing their deals in response to volatile swap rates, which calmed during June.
“If swap rates reach a turning point to drop then there will be an expectation for fixed mortgage rates to come down, but this may be a slow and steady process to have a huge impact on overall average rates.”
Springall continued: “The concerns surrounding mortgage affordability among borrowers remain and the Government will no doubt be under the spotlight to see what plans may be set in motion to support homebuyers and those looking to get onto the property ladder.
“Those borrowers coming off a fixed rate deal this year will note the average Standard Variable Rate is above 8%, so considering a lower rate fixed or tracker mortgage would be wise.
“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.
“It is essential that any borrowers who are struggling seek advice from their lender and an independent broker to navigate the latest deals available to them.”
