Lenders have cut mortgage rates by up to 8 per cent in the last three months, as competition increases for first-time buyers and those remortgaging.
The latest data analysis from Mortgage Brain shows that the biggest reductions have been to mortgages at higher LTV brackets. For example, the cost of two-year fixes at 90 per cent LTV have come down by 8 per cent since April 2018.
Mortgage Brain calculates that this equates to savings of £576 a year for a borrower with a £150,000 mortgage.
Compared to a year ago (July 2017) the average two-year fix at 90 per cent LTV is now 10 per cent cheaper.
Elsewhere, two-year fixes at 60 per cent LTV have reduced by 3 per cent over the past quarter.
Longer term fixes have also reduced in price: the average five-year fix at 90 per cent LTV is 3 per cent cheaper when compared to costs in April. This equates to a 5 per cent reduction year on year.
There has been a more modest reduction at lower LTV brackets. Over the past three months the cost of three- and five-year fixes at 60 per cent LTV have reduced by 1 per cent.
These rate reductions aren’t restricted to fixed-rate mortgages. The average two-year tracker (at 80 per cent LTV) is 2 per cent lower than it was three months ago.
Mortgage Brain’s chief executive Mark Lofthouse says: “With fresh predictions for interest rates to rise again next month, the landscape could once again be on the verge of change.
“As before though, most predictions imply that the increase will be low and gradual so dramatic changes shouldn’t be seen in the short term.”
He says this data reinforced the picture that the mortgage market remained particularly competitive for first-time buyers and those looking to remortgage.