Over the past six months there has been a major increase in the number of fixed rate 95% LTV mortgages offered by banks, Moneyfacts.co.uk has found.

This is resulting in the former market share enjoyed by building societies being rapidly eroded.

Historically, building societies have held a greater share of the 95% LTV sector, largely due to the fact that banks have been reluctant to offer such high-risk products.

Since the second phase of Help to Buy, however, the tide has started to turn.

Participating banks are now able to offer 95% LTV mortgages thanks to the Government standing guarantor of 20% of each loan, so the risk to the banks is actually 75%.

Sylvia Waycot from Moneyfacts.co.uk said: “The 95% LTV mortgage has been reluctant to rejuvenate its place in the market for far too long, but at last it has come to the fore.

“It is interesting to see how the banks have so quickly dominated the fixed rate 95% LTV market from the building society sector.

“Having been pushed out of the fixed sector, building societies have responded by offering a larger number of 95% variable mortgages than has been seen for some time.

“The danger of a variable mortgage for a first-time buyer, however, is that you are at risk of fluctuating monthly repayments and the need for budgeting for increases is more important, especially with the current uncertainty of when rates will rise and by how much.”