Moneyfacts: Rates at high LTVs fell the most during 2019

Michael Lloyd

January 2, 2020

Higher LTV fixed rates received the largest interest rate cuts over the course of 2019, data from Moneyfacts has shown.

The average 2-year fixed rate at 95% LTV has fallen by 0.22% from 3.46% in January to 3.24% today.

Meanwhile the average 5-year fix at 95% LTV fell by 0.31% from 3.86% to 3.55%.

Darren Cook, finance expert at Moneyfacts, said: “Those borrowers who can only manage to raise a 5% deposit have seen the maximum 95% LTV average rate fall significantly for 2, 5 and 10-year fixed deals.

“This is fantastic news for prospective first-time buyers who have been planning and saving up to get their foot on the property ladder in 2020.

“There has been a concerted drive by mortgage providers during 2019 to try and secure the business of potential first-time buyers, who are the lifeblood of the mortgage and property markets, and it is encouraging to see rates decrease as a result of some healthy competition.”

The largest fall has taken place in the growing 10-year fixed rate market, where the average rate at 95% LTV fell by 0.96% from 5.05% to 4.09% during the year.

Cook added: “Decade-long fixed rate mortgages may offer a little more certainty over the longer-term, but first-time buyers must also consider that they may not be able to remortgage down to a lower LTV tier – and in turn access cheaper rates – during a 10-year term.

“Despite this increase in competition at higher risk LTV tiers, after the financial crisis the Financial Conduct Authority introduced clear affordability measures that mortgage providers must follow, so potential first-time buyers will still need to jump through several affordability hoops before they will find themselves on the first rung of the property ladder.”

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