A year ago, the average interest rate on a 2-year fixed rate mortgage was 3.98% and today it is 3.46%.
Interest rates have been falling for 95% LTV mortgagesdespite interest rates increasing overall,financial information business Defaqto has found.
A year ago, the average interest rate on a 2-year fixed rate mortgage was 3.98% and today it is 3.46%.
Brian Brown, head of insight at Defaqto, said:“Buying a home is a huge investment and high prices have kept it out of the reach of many for years. It looks like the cost of buying a home has just got a bit easier for first time buyers as prices have finally stopped rising and mortgages are cheap.
“For those looking to get a mortgage, it is important to do your sums and check exactly what you can afford to borrow.
“While interest rates are low, an increase of just 1% can add hundreds of pounds to a monthly repayment and thousands to the overall cost of a home.
“It’s important to factor in what an increase could mean for your mortgage and whether you can afford it. If you need advice, talk to a qualified mortgage adviser who can recommend the best product for your needs.”
The best buy 2-year fixed rate available today is 2.86% from Barclays. However, a year ago the equivalent best buy was 3.49% from Hanley Economic Building Society.
This 0.63% difference means a potential saving of £68 per month, based on a £200,000 mortgage over 30 years, compared with a year ago.
Not only are mortgages getting cheaper but there is also more choice in this part of the market. There are now 290 95% Loan-to-value (LTV) fixed rate mortgages available now, which is almost a 50% increase on a year ago (199).
More lenders are serving this market too with 58 providers today compared to just 52 a year ago, an increase of 10%.
