Research has found that there are 97% fewer mortgages available for people with only a 10% deposit than there were two-and-a-half years ago.
According to moneysupermarket.com, there are only 102 mortgages for people borrowing up to 90% of their home's value, down from 3,148 different deals at the beginning of 2007.
Despite interest rate cuts by the Bank of England, which cut the base rate to a record low of 0.5%, rates charged on the loans are slightly higher than they were in 2007.
Borrowers of 90% mortgages, who are typically first-time buyers, were paying 6.20% in January 2007, when the base rate was 5%, but now the rates have risen to 6.23%, despite the base rate having been set at 0.5%.
As a result the average rate these borrowers pay above the base rate is 5.73%, compared with a differential of only 1.2% in January.
The findings will add to concern that lenders are not making affordable loans available to buyers and as a result are stifling any recovery in the housing market.
First-time buyers are traditionally seen as the driving force behind the market, but with so few 90% loan-to-value (LTV) ratio mortgages available they are struggling to get on the property ladder, and without them existing homeowners are finding it increasingly difficult to trade up.
This research comes after a run of positive data on the housing market, with both Nationwide and Halifax reporting house price rises of 1.2% and 2.6% respectively during May.
The Royal Institution of Chartered Surveyors said that inquiries from new buyers increased for a seventh consecutive month during May to reach their highest level since August 1999.
The Council of Mortgage Lenders also reported a 16% jump in the number of mortgages approved for house purchase during April.
But the CML's figures also showed that, while first-time buyers taking out a mortgage increased for the third month in a row to 13,500, the highest level since October last year, they were putting down average deposits of 25%, reflecting the shortage of home loans available to people with small deposits.
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