Moneyfacts UK Mortgage Trends Treasury Report, not yet published, reveals that the average two-year fixed-rate at maximum 95% loan-to-value (LTV) has decreased by 0.02% from 3.27% to 3.25% since last month and the average two-year fixed-rate at 90% LTV has decreased by 0.04% from 2.66% to 2.62%.
The average five-year fixed rates at the higher LTV tiers have also fallen during November, with the maximum 95% LTV decreasing by 0.03% from 3.60% to 3.57%, and the average rate at 90% LTV decreasing by 0.02% from 2.96% to 2.94%.
Darren Cook, the Finance Expert at Moneyfacts, said: “First-time buyers or those borrowers seeking higher LTVs seem to have benefited the most during November, as providers appear to be once again competing for this business by driving interest rates down.
“During the latest round of competitive cuts, it appears that mortgage providers are lowering rates for those with a smaller deposit, with the average rates at 90% and 95% seeing greater reductions than their lower LTV counterparts. This follows a summer of fairly muted activity at the riskier, higher LTV tiers, following the warning issued by the CEO of the Prudential Regulation Authority in May that the Bank of England is watching mortgage rates ‘like a hawk’.
“With the average two-year fixed-rate at 95%, LTV falling by 0.02% over the past month and the average rate at the 90% LTV tier decreasing by 0.04%, the disparity between these rates has now widened to 0.63%. Meanwhile, the average five-year fixed rates at 95% and 90% LTV have fallen by 0.03% and 0.02% respectively during November, meaning the disparity between these average rates also stands at 0.63%.
“The difference in average rates between 90% and 95% LTV tiers has historically always been greater than differences in average rates between LTVs lower down the tier scale, so it is always worthwhile for a potential first-time buyer to try to raise an additional deposit and attempt to step down the ladder to find a deal offering a more favourable interest rate.”
The Authors behind the data
Moneyfacts is the UK’s leading independent provider of finance product data. For 30 years, Moneyfacts’ information has been a key driver behind personal finance product decisions. With data going back over 20 years, the Moneyfacts Treasury Reports combine past and present market data to provide an in-depth analysis of the credit card, mortgage, personal pension and savings markets. All reports include commentary, graphs and tables highlighting key trends.
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