The average two-year fix barely changed this week, but the direction of travel is still very much down, according to data from Moneyfacts.
At 2.50 per cent, the average rate reads the same as last week’s number, but cuts on products at the higher end of the risk curve are putting pressure on the average, revealed when expressed by four decimal places, which shows a fall of 0.0033 per cent.
“We’re seeing exactly the same thing as last week… competition is driving this,” says Moneyfacts financial expert Darren Cook.
“Lenders are trying to secure first-time buyer business, and 95 per cent LTV products continuing to receive rate cuts shows that they are cutting risk attributes to do do so,” he adds.
Figures show that on the 1 December, the average two-year fix for a 95 per cent LTV product was 3.54 per cent, while the average rate for a 90 per cent LTV offering was 2.70 per cent.
“There’s much more margin on the 95 per cent LTV products to be competitive on,” Cook explains, evidenced by the fact that as of 7 December, while the average two-year rate for a 90 per cent LTV product remains at 2.70 per cent, the rate on the 90 per cent LTV stands at 3.49 per cent – a cut of 0.05 per cent.