Average mortgage LTVs hit record high as buyers borrow more: Moneyfacts

Higher loan-to-value mortgage deals are rising as first-time buyers take on larger mortgages, Moneyfacts UK data shows.

Mortgage product choice at 95% LTV rose month-on-month. Deals at 95% and 90% represent around a quarter (24%) of the core deals in the market. However, choice at 60% LTV dipped over the same period, its lowest count since March 2024.

As a result, the Moneyfacts average LTV of a core mortgage product hit a record high of 79.31%.

Despite increased choice, buyers with a limited deposit or equity of 5% or 10% will find the average fixed rates at 95% and 90% LTV rose across the board, further above 6%.

The Moneyfacts average new mortgage rate rose by 0.06%, from 5.83% in October to 5.89% at the start of November, its highest point in three years. The rate was last below 5% in March 2026 (4.90%) and last above 6% in November 2023 (6.07%).

Mortgage product churn calmed slightly in October, with the average shelf-life of a deal rising to 17 days, four days more than the month prior, down from 21 days a year ago.

Rachel Springall, finance expert at Moneyfacts, said: “The churn of mortgage products continued in October, with rises and falls at opposite ends of the LTV spectrum. At the lower end, the number of deals at 60% LTV fell to its lowest point since March 2024 yet deals at 95% LTV rose month-on-month. 

"Due to choice contracting slightly at lower LTVs, the Moneyfacts average LTV of a core mortgage product has reached a record high of 79.31%, its highest point since electronic records began in November 2011. This shift comes at a time when lenders have faced months of uncertainty surrounding the path of interest rates, and wider market concerns over weak demand for property amid a cost of living crisis. In an attempt to help more people buy their first home, the government’s Your First Home scheme opens for pre-registration next month, to allow new buyers to check their eligibility. Applications are opening in February 2027 to provide an equity loan of 20% towards a new build purchase.

“Affordability constraints among first-time buyers can lead them to seek out higher LTV options, or decide to borrow at a larger loan-to-income ratio, say over five times their income, with the aim of stretching their budget to secure a home. The time it takes to raise a substantial deposit is a key hurdle, and the average age is higher as a result, now around 33 compared to 31 a decade ago, according to UK Finance, with the typical deposit around 120% of gross income.

"Yet, over this period, the idea of stepping onto the first rung of a ‘property ladder’ is losing its appeal and is being bypassed. Instead, the desire for a bigger home for longer is making up a higher share of purchases. Skipping smaller starter homes altogether can disrupt the circulation of property, which could have the repercussion of bottlenecking the wider market. New buyers are borrowing bigger loans against properties as a result, as, according to the ONS, the median LTV ratio for first-time buyers in 2025 was 85.6%, which was the highest level recorded since before the 2008 financial crisis. 

"First-time buyers are also securing homes worth a higher multiple of their income, with the income ratio up to 4.3 in 2025 from 3.7 in 2006, according to the ONS. As affordable housing remains in short supply, lenders will need to work hard to loosen affordability barriers without increasing risk in line with new rules, and continue to innovate products to help new buyers, and support their existing mortgage customers.”