Average mortgage rates in the highest LTV bands have fallen by as much as 29 basis points over the past month, data from Moneyfacts reveals.
Two-year fixes at 90% LTV have fallen by 29 basis points to an average of 2.56% while at 95% LTV they have dropped by 25 basis points to 3.32%.
The average two-year fix across all LTVs was down by 13 basis point to 2.25% and the average five-year fix dropped by 8 basis points to 2.55%.
It was the fourth consecutive month of falls for two and five-year fixes, both of which were at their lowest level since September 2020.
Product choice has improved for the 12th consecutive month with a further 127 deals added, taking the total to 4,939.
Although product numbers remain slightly below pre-pandemic levels of 5,222 in March 2020, the number of deals has more than doubled compared to a year ago.
Moneyfacts finance expert Eleanor Williams says: “As living costs are on the increase, it is good news that mortgage rates have continued to reduce.
“At 2.25% and 2.55% respectively, the average overall two- and five-year fixed rates are the lowest they have been in 13 months, fuelled by falls in the average rates across the majority of the LTV tiers.
“Borrowers now have the chance to secure lower rates than were on offer a year ago when the sector was being rocked by the pandemic.
“In addition, those who took a now maturing two-year deal in October 2019 and those who locked in to a five-year initial term in October 2016, despite the turbulent past 18 months, may also be able to reduce their monthly mortgage payment outgoings, as the overall average rates are lower now than were on offer when they secured their current deals.
“Those with the smallest levels of deposit or equity will be pleased to note the most significant reductions are towards the top of the LTV tiers, and are even more dramatic than last month at both 90% and 95% LTV.
“The gap between taking a two- or five-year fixed deal at these LTVs has widened month-on-month, however, first-time buyers may still prefer to lock into a five-year fixed rate deal, especially with murmurings of an interest rate rise on the horizon.
“Those considering a new mortgage may wish to secure the knowledge and advice of a qualified adviser, who can help with assessing their priorities and calculating the best route forwards for their circumstances.”
Original Article from Mortgage Strategy 11/10/21