Published: 04/05/2010

During the last six months the competition amongst mortgage lenders has intensified, despite the housing market showing precious few signs of recovery.

Many of the rate cuts have been available for borrowers with a 20% deposit or more, with mortgage products aimed at the first time buyer still not even on the menu from some high street lenders.

Whilst 95% and 100% plus LTV mortgages are unlikely to be found except for a few non standard products where additional security is mandatory, and quite rightly so, there is some brighter news for those looking to buy their first property.

Britannia and The Co-operative Bank have returned to 90% loan to value lending and launched a choice of very keenly priced products to support customers looking to purchase their first home.

For a two year fixed rate there is a choice of 5.99% and no fee or 5.49% with a £999 fee, both look worth closer inspection and fare well against the current best buy of 5.98% and £495 fee from Nationwide Building Society.

If you feel more comfortable with a longer term fix, there are five year options priced at 6.39% and no fee or 6.09% with a £999 fee, both will give the NatWest 6.39% with no fee deal a run for its money.

For those who are comfortable with a variable rate mortgage, there is also a three year tracker option for first time buyers at 4.49% with a £999 fee.

It’s good to see that the competition which has driven rates lower in the mainstream mortgage market is starting to filter through for those looking to take that big step on to the first rung of the housing ladder. This is welcome news however managing to scrape together a 10% deposit will still seem a distant dream for many people.

In other mortgage news, ING Direct ramped up the pressure on HSBC at the top of the best buys for discounted tracker rate mortgages. HSBC is offering 2.29% and £999 fee for two years, whilst this week ING relaxed the LTV from 60% to 70% for its 2.55% two year mortgage with no fee.