Choice of low deposit mortgages ‘highest since 2008’

The choice of low deposit mortgages is at its highest since 2008, in a positive sign for first-time buyers, according to a financial information website.

At the start of December, there were 476 products on the market for borrowers with a 5% deposit, and 917 deals for people with a 10% deposit, according to financial information website Moneyfacts.

The website, which has recorded data for the start of each month, said this is the highest count for products offered at these deposit sizes since March 2008.

In further signs of improvements for people looking for a mortgage, Moneyfacts said that average two and five-year fixed mortgage rates were at their lowest points since September 2022 at the start of December.

The average two-year fixed-rate mortgage on the market at the start of this month was 4.86% and the average five-year fixed-rate was 4.91%.

The choice of fixed and variable-rate mortgages across all deposit sizes has also increased, compared with the previous month.

Some 7,054 mortgage options were counted by Moneyfacts in December, up from 6,918 in November.

Rachel Springall, a finance expert at Moneyfacts, said: “Mortgage rates continue on the downward trend and November was particularly fruitful for fixed-rate cuts.

“The re-pricing by lenders led to the average five-year fixed rate dropping below 5% for the first time in over two years and sits at its lowest point since before the mini-budget in September 2022, alongside its two-year counterpart.”

Ms Springall added: “The improvement in cost and product availability of mortgages paints a positive picture for borrowers as we edge towards the new year.

“This year has not been without a few ups and downs for rate moves and product availability, but all signs are looking encouraging for the mortgage market to thrive moving into 2026.”

Hina Bhudia, a partner at Knight Frank Finance, said: “The Budget removed some uncertainty over the path of borrowing costs, which is giving lenders the scope to keep trimming mortgage rates.

“A December cut from the Bank of England looks likely and we may see another before the summer. Halifax and HSBC both made reductions in the days following the Budget. NatWest and Barclays will make reductions on December 9.”