Higher LTVs on offer

The new analysis from moneysupermarket.com has shown that providers are beginning to loosen the purse strings with more products now available to mortgage borrowers with lower deposits or equity in their properties.

Deals with an 85% loan to value (LTV) have seen the biggest rise in availability since December 2009 - an increase of 22% means there are now 384 products available to those with a 15% deposit. Those with just a 10% deposit are also in luck as moneysupermarket.com's figures show there has been an increase of nearly 11% since December 2009 with 165 products now available.

The good news doesn't stop there. Rates across all mortgage products have begun to creep down since October last year. Rates for 80% LTVs have fallen hardest, with the average rate now sitting at 4.97%, 0.77% lower than in October last year.

Hannah-Mercedes Skenfield, mortgages channel manager at moneysupermarket.com, said: "Lenders seem to have started 2010 with their doors open and are clearly more open to mortgage lending than they have been for some time. The increase in products available at 85% and 90% is particularly encouraging for first time buyers, as scraping together a large deposit is not easy, and was the reason many prospective first-time buyers deserted the market in their droves last year.

"Whilst rates are obviously lower for those with a higher cash deposit, it is encouraging to see rates starting to drop across all LTV products. Although there are only nine products available at 95% LTV, the average rate has fallen by 0.71% since October. It is not all good news though; last week's announcement by Skipton Building Society increasing their standard variable rate (SVR) indicates we might see an increase in rates elsewhere in the mortgage market. This coupled with the sharp increase in inflation could lead to a reversal in this trend."