When in the market for your first ever home, getting a piece of good news regarding your chances is a really positive thing. 

Most first home purchases have a few to’s and fro’s along the way, and the occasional hiccup is to be expected.

But when you hear positive mortgage industry news when on the lookout for that ideal first property, this is cause for optimism.

This week has seen exactly that, as reports of lower mortgage rates and more product choices for first-time buyers have come to the fore.

In the latest Roots Mortgages blog, we take a look at what’s happening and what this means for first time buyers. 

Are mortgage rates dropping? 

It certainly looks that way, with some evidence to suggest that rates are moving in the right direction from a buyer’s perspective.

Statistics from MoneyFacts show that the average two-year fixed rate and five-year fixed rate mortgage have dropped slightly since June. The average two-year fixed rate mortgage is now at 2.55%, while the average five-year fixed rate mortgage stands at 2.78%. 

While this is a slight decrease, it’s still substantially higher than the rates seen at this time last year. At that point, rates for two-year and five-year mortgages floated around the 2% mark.

The slight drop since earlier in the year does however suggest that there is a possibility mortgage rates are changing in the positive way. This can only be a good thing for anybody looking to secure that new home in the near future.

And there are more mortgage products out there?

That’s right. Mortgage products available on the UK market reached their highest point in June 2021 since March 2020. This saw a total number of mortgage products in excess of 5,200 available to take advantage of, with the figure going back to pre-pandemic rates and potentially indicating a return to normalcy within the industry.

The product increase covers all LTV brackets according to the research from MoneyFacts. 

With a fair number of first-time buyers potentially having low deposits, how many products are available for this type of buyer is particularly pleasing.

If you were only able to afford a 5% deposit this time last year, then only 14 products were available to you. Fast forward to now however, and there are in excess of 250 products available catering for 95% mortgages. 

This growth of such products specifically for 95% LTV mortgages has no doubt been aided by the government’s support scheme. This is for applicants who are only available to afford a 5% deposit but keen to get their foot on the ladder. This was announced as part of Chancellor Rishi Sunak’s budget earlier in the year.

What does this mean for me?

If you are looking to get on the property ladder before the end of the year, then both pieces of news should be seen as a positive. Rates lowering is hopefully a sign of things to come, while higher number of mortgage products represent more flexibility and opportunity when finding a deal to match your circumstances – be they as a freelancer, contractor or simply just for a typical residential mortgage.

When taken together, it could be optimistically inferred that the mortgage industry is starting to return to something akin to the status quo as was pre-pandemic. There is still a fair way to go, but things are looking positive.