Moneyfacts latest UK Mortgage Trends Treasury Report data reveals the average two-year fixed rates at 95% and 90% loan-to-value have fallen to their lowest points since September 2022. The reduction in cost coincides with a rise in the choice of deals at 95% loan-to-value, reaching its highest count in 17 years (March 2008).
According to Moneyfacts, the average 95% LTV two-year fix now stands at 5.41%, while the 90% LTV equivalent has dropped to 5.24%. The wider mortgage market has also seen modest rate reductions, with the overall average two- and five-year fixed rates edging down to 4.94% and 5.01% respectively. Meanwhile, product availability at the 95% LTV tier has surged to its highest count in 17 years, suggesting lenders are competing more aggressively for business at the lower-deposit end of the market.
Rachel Springall, Finance Expert at Moneyfacts, said:
“Borrowers with a limited deposit of just 5% or 10% will be thrilled to see the cost of a two-year fixed mortgage dip to a three-year low, before the ‘mini-Budget’ in September 2022. The number of deals available to borrowers at 95% loan-to-value has also improved, with the pool of deals at its highest count since 2008. The Government has been very vocal that it expects lenders to do more to boost UK growth, so the rise in choice and drop in cost is a healthy step in the right direction. However, deals at 95% loan-to-value only represent 7% of the residential mortgage market, so there is more room for improvement. Despite these moves, there will be borrowers who feel stuck due to a lack of supply in affordable housing.
“It may be a relief for borrowers to see fixed mortgage rates moving downwards once more. The Moneyfacts Average Mortgage Rate dipped below 5% and the activity among lenders led to a drop in the average shelf-life of a deal to 21 days. These movements will be positive news to those refinancing. Indeed, in November 2023, the average two-year fixed mortgage rate was 6.29%, compared to 4.94% now. That is a difference of £203 per month in repayments on a £250,000 mortgage over 25 years. There will also be millions of borrowers who secured a cheap five-year fixed rate back in 2020, who are due to refinance, so they do need to prepare themselves for higher mortgage repayments. Seeking advice to assess the latest deals and not to fall onto the revert rate is essential, particularly as the average SVR is 7.27%. It is worth noting that lenders are already working hard to price down their mortgages to entice new business as part of their end of year targets, supported by recent falls in swap rates. In addition, even existing borrowers can choose to lock into a new rate around six months before their current deal ends in most cases.
“The key date that is causing borrowers to adopt a ‘wait and see’ approach is without doubt the upcoming Budget. So far, the rumour mill has spun out a variety of ideas which could impact borrowers from different ends of the market. On one hand, the idea to abolish Stamp Duty Land Tax (SDLT) and an introduction of a new way of taxing could work in favour of first-time buyers, saving them thousands of pounds upfront, helping them get that crucial first step on the property ladder. However, like a double-edged sword, creating a new property tax that puts the burden on sellers could lead to homeowners refusing to move, hitting supply. Supply could worsen if CGT exemptions on primary residences is removed and if the yearly tax levy dubbed the ‘mansion tax’ becomes a reality. It is essential borrowers seek advice before they make any quick decisions and not feel rushed because of the Budget rumour mill.”
| Mortgage market analysis | ||||||
| Nov-23 | Nov-24 | May-25 | Oct-25 | Nov-25 | ||
| Fixed and variable rate products | Total product count – all LTVs | 5,678 | 6,402 | 6,993 | 6,998 | 6,918 |
| Product count – 95% LTV | 254 | 358 | 462 | 453 | 465 | |
| Product count – 90% LTV | 709 | 748 | 876 | 909 | 897 | |
| Product count – 60% LTV | 619 | 758 | 786 | 790 | 787 | |
| All products | Shelf-life (days) | 20 | 17 | 19 | 22 | 21 |
| All LTVs | Average two-year fixed rate | 6.29% | 5.39% | 5.18% | 4.98% | 4.94% |
| Average five-year fixed rate | 5.86% | 5.09% | 5.10% | 5.02% | 5.01% | |
| 95% LTV | Average two-year fixed rate | 6.55% | 5.83% | 5.63% | 5.46% | 5.41% |
| Average five-year fixed rate | 5.93% | 5.40% | 5.58% | 5.44% | 5.41% | |
| 90% LTV | Average two-year fixed rate | 6.25% | 5.70% | 5.42% | 5.27% | 5.24% |
| Average five-year fixed rate | 5.91% | 5.24% | 5.24% | 5.18% | 5.16% | |
| 60% LTV | Average two-year fixed rate | 5.94% | 4.86% | 4.65% | 4.52% | 4.43% |
| Average five-year fixed rate | 5.47% | 4.66% | 4.58% | 4.68% | 4.67% | |
| All LTVs | Standard Variable Rate (SVR) | 8.19% | 7.95% | 7.58% | 7.27% | 7.27% |
| All LTVs | Average two-year tracker rate | 6.15% | 5.71% | 5.16% | 4.67% | 4.66% |
| Data shown is as at the first available day of the month, unless stated otherwise. | ||||||
| Source: Moneyfacts Treasury Reports | ||||||
| Moneyfacts Average Mortgage Rate | |||||
| Nov-23 | Nov-24 | May-25 | Oct-25 | Nov-25 | |
| Moneyfacts Average Mortgage Rate | 6.07% | 5.31% | 5.17% | 5.02% | 4.99% |
| Calculated from the total of all on-sale, core market, fixed and variable tracker mortgages. Standard exclusions apply: Self-build only, shared ownership only, new build only, shared equity only, standard variable rates and adverse credit | |||||
| Source: Moneyfacts Average Mortgage Rate. | |||||
Also sharing her reaction to these data, Mary-Lou Press, President of NAEA Propertymark (National Association of Estate Agents), comments:
“Falling mortgage rates and a rise in the number of 95% loan-to-value products are welcome signs that lenders are increasing support for buyers with smaller deposits. This will be particularly encouraging for first-time buyers who continue to face significant affordability challenges amid high house prices and a shortage of homes.
“However, while lower monthly payments can help more people access finance, the fundamental issue of a lack of housing supply remains. Without a meaningful increase in the number of affordable homes for sale, more tailored mortgage deals alone will not solve the wider problems within the housing market.
“It would be a welcome to see the UK Government use the upcoming Budget to deliver policies that stimulate housing supply across all tenures, support sustainable lending, and give consumers confidence to move. Measures that boost homebuilding and maintain a balanced, stable property market will ensure that falling mortgage costs translate into real opportunities for households, rather than further upward pressure on prices.”
