There has never been so much choice of mortgage deals on the market as there is now, since the beginning of the Covid-19 pandemic. This is fantastic news for many as the past year has seen high rates and a decline in good deals. Compare Agents takes a look at what is happening to the mortgage market and whether it is actually becoming easier to get a mortgage.

Mortgages And Covid-19.

The ongoing pandemic has had a huge effect on all elements of the UK economy including the housing market. As restrictions will at some point start to lift, we look at what this means for you and your mortgage.

The Moneyfacts UK Mortgage Trends Treasury Report, found that there are currently 3,215 mortgage deals available, the highest number since March when there were 5,222 deals in the market.

The biggest rise in deals over the last few months can be found on mortgages requiring a 10% deposit/equity – 90% loan-to-value (LTV) – which is good news for first-time buyers. This is accompanied by the average two and five year fixed rates at 90% LTV seeing the largest fall of all the lending tiers, reducing by 0.09% and 0.07%.*

90% Mortgages

First-time buyers have been hardest hit by the COVID-19 mortgage cull, but 90% mortgages have seen somewhat of an upturn lately. However, rates still remain high, with the cheapest two-year deal being around 1.5% higher than before the pandemic.

What about mortgage rates?

The increase in availability hasn’t necessarily led to cheaper rates. Average rates are rising slightly, with two-year deals now showing seven consecutive months of increase.

The speed of the rise seems to be slowing down though, meaning lower rates could be on the horizon…

What About 95% Mortgages?

A 95% mortgage is a loan for 95% of a property’s value. You must provide a deposit for the remaining 5%. So, if you want to buy a home valued at £200,000, a 95% mortgage will lend you £190,000 of the cost and you’ll need to have saved a 5% deposit of £10,000.

Due to COVID-19, 95% mortgages are currently very difficult to find and it’s not known when they will reappear on the market. So, if you’re looking for one, you may have to wait and in the meantime, try to save a larger deposit towards a home.

Is It Becoming Easier To Get A Mortgage?  

Whilst  more availability and longer lasting deals l is good news for homebuyers, it is still a complicated time to get a mortgage, although lenders are starting to ease the harsh new rules they introduced in 2020. For example:

  • Nationwide brought back its maximum 40-year mortgage term for first-time buyers in January.
  • Barclays reinstated its maximum ‘loan to income’ multiple of 5.5 for borrowers with earnings over £75,000 (£100,000 for couples)


  • Many banks remain reluctant to offer such long-term deals
  • You might need to pay a higher up-front fee now if you want to get the best rate.

Here are our top pieces of advice for improving your chances of getting a mortgage and getting the best mortgage deals:

  1. Save The Biggest Deposit You Can – Mortgage providers offer the lowest interest rates for those with larger deposits. Most of the top deals available are limited to buyers who can save between 35% and 40% of the property’s value. Those with only a 10% deposit will pay a higher rate.
  2. Know Your Credit Score – You will need a good credit score to qualify for the best mortgage deals. Use a ‘soft check’ credit score calculator so it won’t affect your credit score.Knowing where you stand in this regard means you won’t receive any nasty surprises.
  3. Pay Off Debts And Close Dormant Accounts – Mortgage lenders look at the total amount of credit available to you as well how much you owe. Clear as much debt as possible and close any accounts you no longer use. If you don’t, lenders may doubt your ability to maintain your mortgage repayments.
  4. Register On The Electoral Role – Many lenders use the electoral roll to verify your identity. Contact your Local Authority and ask for a registration form or sign up online. Also ensure the address the credit agencies have for you is up-to-date.
  5. Prepare Your Paperwork – Make sure you have an up-to-date passport and that the address on your driving licence is correct. Other documents you will need to show include a recent letter from a bank or utility company that proves your address. Find your bank statements and payslips/proof of earnings for the last three months and P60s for the last two years. If you receive bonuses at work, you must provide evidence of this too. If you are self-employed, you will need an SA302 form for the last two to three years from HMRC, or your full accounts for the last two to three years.
  6. Shop Around – Research the type of mortgage you want and make sure that you get the best possible deal for you personally. Finding the cheapest deal could save you thousands, if not tens of thousands, of pounds over 25 years.
  7. Don’t Keep Changing Your Application – Once you’ve started your mortgage application, don’t start changing figures because you decide you want to borrow more money or look a better applicant. This can cause hold ups. The lender could refuse to give you the extra money and might even decide not to lend to you at all.

Should I Use The Estate Agent’s Mortgage Advisor?

Estate agents are often very keen to get you to use their in-house mortgage broker. They may have sales targets to reach each month. They will also earn a fee if you choose to use the in-house adviser which is why they can seem pushy.

That said, most in-house brokers will still give you mortgage advice based on your personal needs and should recommend the right mortgage for you having looked at a whole range of lenders. Don’t forget to compare estate agents as well as mortgages when it comes to selling your property.

You are free to move home during the pandemic. However, we advise you to compare estate agents and their fees, as the process of searching for and moving into a new home is different.  

Compare Estate Agents in your local area We use real-time property sales data to give you performance details of your local estate agents. 

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