The average rate for a 2-year fixed mortgage at 90% LTV stands at 5.98%, 0.40% lower than a year ago.
While all the LTV rates have fallen compared to this time last year it is the 90% LTV tier that has seen the biggest fall.
The average rates for 75% and 60% LTV mortgages are 0.19% and 0.15% lower than a year ago respectively.
Over the same period, the number of deals available to borrowers with a 10% deposit increased by 41% to 229.
The number of lenders offering 90% LTV deals also increased from 31 in May 2010 to 48.
Michelle Slade, spokesperson for Moneyfacts.co.uk, said: “Over the last year lenders have witnessed increased consumer demand for a return of 90% LTV mortgages, it has taken some time, but it appears they are finally listening.
“The increased competition in the 90% LTV tier has resulted in a large reduction in rates compared to the same time last year, even though base rate has stagnated.
“The news will be a boost to first-time buyers who have been left with limited options in the last few years.
“Skipton building society has provided further help to those borrowers with just a 5% deposit as it became the first lender to offer rates lower than 6.00%, without the need for a guarantor, since the peak of the credit crisis.”
David Hollingworth, head of communications at London & Country, added: “You can definitely see some gradual improvement both in the rates on offer at 90% and also the number of products available.”
Fahim Antoniades, group director at Mortgage Centre IFA, added: “It’s true that 90% LTV rates have gone down but they’re still a long way off from when the market was at its peak.”
“If you’re looking to borrow 90% on properties less than £250,000 the cheapest deal I can see is with Loughborough. The next lender where you get decent income multiples as well as 90% LTV is with Nationwide which offers a tracker rate of 4.63% for two years and can lend up to five times your income if your credit score is good.”
Alison Beech, group executive at Spicerhaart, said: “The drop in average rate is probably down to a number of factors. Greater availability has led to greater competition which is good news for borrowers and the market in general.
“Lower margins in the lower LTV bands mean that the margins in the higher LTV bands have become more attractive, which has led to an increase in both number of lenders and an improvement in rates.”
