Mortgage rates still cheap for first-time buyers, study finds
A new study suggests that first-time buyer mortgage rates are still falling despite rumours of another interest rate increase on the horizon for as early as May.
In September and October last year, many mortgage lenders began increasing their rates after the Bank of England (BoE) announced its intention to hike its base rate to 0.5 in November.
In recent days, the BoE has confirmed that another interest rate hike is on the cards for the spring, but research suggests that this time around, mortgage lenders have not taken the same approach.
In fact, Moneyfacts UK’s latest Mortgage Trends Treasury Report suggests that many great deals are still available and that, in some instances, mortgage rates are actually failing.
The report suggests that the average two-year fixed rate is 2.35 per cent – a rate which has remained stagnant for at least three months now.
Meanwhile, high loan-to-value (LTV) deals have actually fallen in recent weeks, with Moneyfacts’ data for February suggesting that the average 95 per cent LTV deal has fallen month-on-month by 0.05 per cent, while the average 90 per cent LTV deal has fallen by 0.03 per cent.
On average, these deals now sit at 4.07 and 2.63 per cent, respectively.
Interestingly, the number of high LTV mortgage products available has also increased this month to 4,570 – suggesting that homebuyers now have approximately 65 more deals to choose from than they would have done back in January.