Having recently introduced daily rate updates to our service, we want to ensure that you stay in the loop with all the twists and turns of the mortgage market. We know there has been a lot of confusion surrounding potential rate changes of late, so we have produced this overview of everything you need to know about mortgage rates right now. Despite months of speculation and base rate rise predictions, figures show that all main product types have seen mixed movement over the past 3 months alone, with a combination of rate increases, decreases and freezes.
Firstly, the current best rate available comes in the form of a 2 year tracker mortgage with a 60% loan to value (LTV) listed at the lowest rate of 0.98%. The same product is also available with 90% LTV at a rate of 1.99%, with the lowest 5 year products listed at 2.59% with 60% LTV and 3.65% with 90% LTV.
Despite speculative rumours of a bursting financial bubble, mortgage rates across the market are significantly lower than this time last year – which comes as excellent news to borrowers, with the majority of products seeing significant reductions. For example:
- The lowest 5 year fixed rate with 90% LTV a starting rate of 1.09% is now 70% lower than in November 2014. Though be warned, this rate increases by increments during the first two years.
- A 23% reduction over the same period was recorded for the lowest rate 2 year fixed products at 60% and 90% LTV.
- The lowest rate 2 year tracker mortgage at 1.99% is now 20% lower than a year ago.
A 70% rate drop for the lowest 5 year fixed product, for example, equates to an initial monthly saving of over £300 on a £150,000 mortgage, and a 23% rate reduction on the lowest 2 year fixed product would result in a saving of £1,005.
However, figures released from Mortgage Brain’s latest product data analysis have equally highlighted the unsettled nature of the market. For example:
- The lowest 2 year fixed product with 90% LTV fell by 7% during the last quarter from 2.45% to 2.28% in August. However, the same product but with a 60% LTV, saw a 10% increase in comparison, over the same period from 1.05% to 1.15%.
- The lowest 5 year fixed products with a 60% and 90% LTV also saw a rise of 10% over the past 3 months – up from 0.99% to 1.09%.
- Whereas the lowest 2 and 5 year tracker rates have stayed inactive in terms of movement.
Due to fluctuating rates and fear of interest rate rises, it is evident that borrowers are avoiding higher LTV products in fear of being affected once rises occur. As such, products at 60% LTV are much more attractive in the current property bubble, and are increasing rapidly as a result…
In comparison to the mainstream product review, data shows there has also been a rate reduction spree elsewhere in the market – for buy to let products.
An 18% reduction over the past quarter has seen the lowest 2 year fixed BTL product with 80% LTV drop from 3.95% to 3.24%, and the lowest 2 year tracker with 80% LTV dropping by 15% from 3.5% to 2.99% since August. An 8% and 5% drop has also been seen for the lowest 5 year fixed products with 60% and 80% LTV – down from 3.24% to 2.99% and 4.45% to 4.24% respectively.
It’s difficult to know how to digest these varying figures as mortgage rates evidently remain unsettled. However, with so many low rates still on offer or being introduced, there is no need to feel worried about your mortgage. Borrowers may be avoiding purchasing property in the current shifting market, but as far as remortgaging is concerned, there’s never been a better time to take advantage of low rates and benefit from some of the best deals yet.
If you are interested in remortgaging, feel free to contact one of our expert brokers for advice, and follow Enness’ daily updates to stay on top of rate changes as they happen.