Real cost of 90pc LTV
The analysis, a breakdown of all main product types in the UK mortgage market (direct and broker) for a repayment mortgage, showed that the lowest interest rate for a 90% 2-year tracker is 105% more than the lowest rate product with a 60% LTV.
Mark Lofthouse, chief executive of Mortgage Brain, said: “Our new product data analysis provides a very clear and concise picture of the true cost of a repayment mortgage and makes like for like comparisons to be made across different product types.
“Not only can this new data assist brokers when they’re conducting a mortgage search and comparing products with their clients, but lenders can also use it to ascertain the position and competitiveness of their products within the market.”
The difference in the lowest rate available between a 2-year fix with a 90% loan to value and a 60% LTV product is almost 82% with the lowest rates being 2.99% and 1.64% respectively.
And borrowers face a 14% difference in the cost for the repayment of the lowest 2-year tracker with a 90% LTV compared to the lowest 60% LTV product.
Although a major difference between the lowest rate at 90% and 60% LTV products can be seen, the analysis since the beginning of 2013 shows favourable results for the overall performance of interest rates.
Based on Mortgage Brain’s analysis the lowest 2-year fixed rate product at 90% LTV has come down by 19% over the past three months and 24% since January 2013, down from 3.94% in January to 2.99% at the start of July.
The lowest fixed rate product, at 60% LTV, has dropped by 6% since April 2013 and by 18% over the past six months.
Meanwhile a 2-year tracker at the same LTV has come down by 30% since the start of the year down from 2.49% in January to 1.75% at the start of the month.