Despite the ongoing affordability pressures and housing supply constraints that continue within the UK mortgage landscape, there is clear and growing momentum in the high LTV lending space, particularly when it comes to supporting first-time buyers.
The recent addition of some now 100% LTV mortgage products has captured considerable attention, and with good reason: these products symbolise both innovation and commitment to inclusion in an otherwise challenging market.
April Mortgages’ entry into the 100% LTV space, while not market-leading on price, is a noteworthy addition, underscoring that lender appetite is not only returning but actively evolving. In fact, there are now 17 zero-deposit mortgage products available from a range of lenders including Lloyds, Halifax, Progressive, Vernon, Beverley, Skipton, Buckinghamshire, Hanley, and April.
This level of product choice is significantly greater than many might assume, and suggests that lending institutions increasingly recognise both the commercial opportunity and social necessity of catering to deposit-constrained borrowers. However, with lenders numbering over the 100 mark, there is clearly potential for more to get involved.
And, of course, not all zero-deposit products are created equal. Some are tightly targeted - restricted to existing current account holders or to borrowers in specific postcodes - while others require a demonstrable track record of rental payments or parental guarantees. But even with these nuances, the takeaway is clear: there is movement, there is momentum, and the options for borrowers are growing, albeit from a small base.
Crucially, this renewed activity at the 100% LTV end of the spectrum appears to be acting as a catalyst for wider borrowing activity, particularly with the involvement of advisers. Anecdotal evidence suggests brokers, when presented with a potential zero-deposit borrower, are increasingly using the opportunity to open up a wider conversation.
If a client can stretch to a 1%, 2%, or even a 4% deposit, the product universe does expand, albeit slightly. What we want to do is expand that even more. So, this month, for instance, a zero to 1% deposit unlocks 17 products and a 2-4% deposit opens up access to 19. Not huge but a positive increase none the less.
However, as you might have guessed, get this up to a 5% deposit and we are entering a much more positive product environment. As I hope you know, each month, I use the Nationwide average house price to look at 95% LTV product numbers.
This month the average price is £273,427, meaning a 5% deposit would be £13,672. With that in hand, a borrower can currently choose from 298 different mortgage products - 269 fixed-rate deals and 29 tracker, variable or discount offerings.
At the top of the two-year fixes best buys we have Leeds Building Society at 4.64%, followed by Lloyds at 4.71% and Progressive’s 4.8% Northern Ireland-only offering. For five-year fixes, Progressive tops the list again at 4.65%, with Lloyds at 4.72% and Monmouthshire Building Society at 4.75%. Notably, Lloyds appears in the top three for both two- and five-year fixes - underlining the fact that even large, mainstream lenders are recognising the value and opportunity in this market segment and pricing competitively.
On the variable side, Newbury Building Society’s three-year discount at 4.19% is currently the standout, with Progressive at 4.69% and Furness at 4.99%. Again, it’s worth noting that while these products often come with geographical or account-based caveats, for eligible borrowers they offer a credible, affordable path into homeownership.
This growing ecosystem of high LTV options raises an important strategic question: how do we ensure more lenders, particularly smaller building societies and specialist institutions, feel confident enough to enter or expand their presence in this space?
The answer increasingly lies in the judicious use of private mortgage insurance.
We are already helping a number of lenders - including regional building societies - do just that. By using insurance to mitigate some of the inherent risk associated with high LTV lending, lenders can offer more competitive products, serve a wider customer base, and maintain compliance with internal and regulatory capital requirements.
And this isn’t just theory. Recent initiatives such as Hanley’s ST Rent to Own Mortgage - supported by our private mortgage insurance - is delivering real-world benefits to borrowers. That product, for example, allows 100% LTV borrowing based on a verified 12-month rental history, providing a bridge to ownership for creditworthy renters in Staffordshire.
The key point here is that private mortgage insurance doesn’t simply make high LTV lending viable - it makes it scalable. For lenders wary of exceeding income multiple caps or concerned about default risk in a volatile economy, insurance provides the safety net that enables participation. And the more lenders we can bring into the space, the more competition we foster, which in turn benefits borrowers through better rates and more product diversity.
Ultimately, this is about recognising that deposit barriers often still remain the single largest obstacle for most would-be homeowners. While it’s encouraging to see product growth at 95% LTV and above, we must continue to expand the market further up the spectrum - from 96% up to 100% - so that aspiring homeowners have options at every step.
We’re committed to supporting this evolution. We believe that private mortgage insurance is not only a prudent risk management tool, but a critical enabler of greater access to homeownership. As lender appetite continues to rise, and as more borrowers explore what’s possible even with minimal deposits, we stand ready to help. Because whether it’s zero, one, or five per cent, every deposit counts - and every product we can unlock takes someone closer to their first home.
