2014 sees rates fall by up to 41pc
Mortgage Brain’s latest figures revealed that the interest rate for a 2-year tracker with a 60% LTV is now 41% lower than this time last year (down from 1.69% to 0.99%).
The rate for the same product also fell by 32% during the previous 12 months, equating to a product that is now available with a rate that is now 73% lower than it was two years ago.
A 32% rate drop has also been recorded for the lowest rate 2-year tracker with a 90% LTV, which is currently listed at 2.45%, down from 3.59% in January 2014.
Five year term products also saw some major rate movement over the past 12 months – good and bad. The lowest rate 5-year fixed mortgage with a 90% LTV, for example, fell 24% from 4.29% to 3.24%.
The lowest rate 5-year tracker (60% LTV), however, is now 60% higher than it was this time last year – up from 1.99% in 2014 to 3.19% as of 1 January 2015.
Mark Lofthouse, CEO of Mortgage Brain, said: “The drop in mortgage rates, when compared to this time last year – and in some cases this time two years ago – is welcome news to a lot of today’s potential homebuyers or those currently looking to re-mortgage their property.
“With the majority of forecasters predicting a rise in base rates in 2015 it will be interesting to see what actually happens, and which way things move, over the course of the next 12 months.”
Rate drops were also seen in the buy-to-let market with the lowest rate 3-year tracker (60% LTV) now 17% lower than this time last year – down from 3.49% to 2.89%.
Similarly, the lowest rate 3-year fixed mortgage with a 60% LTV is now16% lower (down from 3.49% to 2.94%), and the lowest rate 2-year tracker (80% LTV) down 15% from 4.29% to 3.65%.
Despite the overall drop in mortgage rates, major rate differences remain between LTV bands with the lowest rate 90% 2-year tracker (at 2.45%) now around 2.5 times (or 147%) higher than the lowest rate product with a 60% LTV (0.99%).
The rate difference between the lowest 60% and 90% LTV fixed mortgage is almost as great – 109% higher – with the lowest rate currently standing at 1.38% (60% LTV) and 2.89% for a 90% LTV product.