Gen H reduces rates across higher-LTV ranges

Gen H has reduced rates by 15 basis points across its 90% and 95% loan-to-value (LTV) ranges, with the aim of making it cheaper for buyers with smaller deposits to find their place on the property ladder.

The move is Gen H's second reduction at the higher-LTV end of its range in three weeks, following a cut of up to 40 bps across its product range on 4th August. These reductions are already live for brokers on Gen H’s panel. 

Gen H says that the cuts land on a widening fault line in the first-time buyer market, as Rightmove's most recent weekly mortgage tracker, compiled from Podium data covering around 95% of the market, shows how sharply rates can step up as the deposit size shrinks.

For a buyer with a 25% deposit, the average five-year fixed rate is 4.97%. For a buyer with a 5% deposit, this rises to 5.68%. This represents the cost of borrowing the same amount at a higher loan-to-value. Two buyers taking out an identical £250,000 mortgage over 25 years pay different amounts simply because of what that £250,000 represents as a share of their property's value.

At 75% LTV, the buyer is charged 4.97%, and at 95% LTV, they’re charged 5.68%, an increase of around £1,260 a year on an identical borrowing amount.

By concentrating these rate reductions specifically on the 90% and 95% bands, Gen H is aiming at buyers who are most exposed to this high-LTV premium: those typically without help from family or existing equity, and for whom a smaller deposit is a function of circumstance, not choice.

Sara Palmer, sales and distribution director at Gen H, said: "The first-time buyer market is splitting - there are those with a bigger deposit, and those who have to pay a premium for the privilege of borrowing at a higher LTV.

"We know the market is volatile right now, and cutting rates at 90% and 95% LTV is a deliberate choice our team has made to back the buyers who need the most help. Brokers have been telling us how much this matters to their clients right now, and we listened."