Spotlight on...Co-operative two-year fixed 90% mortgage

The deal

The Co-operative has cut the rate on its two-year fixed-rate 90 per cent mortgage from 6.09 per cent to 5.69 per cent.

The good points

The rate cut puts the deal near the best available for those who can only raise a deposit of 10 per cent. It has no arrangement fees and is also available to customers of the Britannia.

The bad points

The rate is still high. The Co-op's own standard variable rate is just 4.24 per cent and it offers a three-year fixed rate at just 3.79 per cent for those with a 25 per cent deposit.

Conclusion

If you're a first-time buyer 90 per cent loan-to-value deals are rare at present. Paying more than the standard variable rate may seem a little foolish, especially as rates may not rise for months, but you may have little choice.

The best current rate over two years at 90 per cent LTV is from the Yorkshire Building Society at 5.59 per cent. But you may be better off saving a bigger deposit and qualifying for a much lower rate, although the savings need to be weighed up against the fees.