You are here: Home - Mortgages - First Time Buyer - News -

Average rates for high LTV mortgages drop

Written by:
First-time buyers are being encouraged to save a larger deposit to buy their first home, as rates for those with a ten per cent deposit are falling at a faster pace than for borrowers who need a 95 per cent loan to value mortgage.

According to Moneyfacts, the average two-year fixed rate at 95 per cent loan-to-value (LTV) decreased by 0.02 per cent to 3.25 per cent from October to November. The average two-year fixed rate at 90 per cent LTV decreased by 0.04 per cent to 2.62 per cent.  

The average five-year fixed rate at 95 per cent LTV declined by 0.03 per cent to 3.57 per cent and the average rate at 90 per cent LTV dropped by 0.02 per cent to 2.94 per cent. 

Higher deposits favourable

The data showed that the disparity between the average two-year fixed rate grew to 0.63 per cent from the 0.61 per cent recorded in October. This now aligns with the gap between five-year fixed rates in the 90 and 95 per cent LTV brackets which also stand at 0.63 per cent. 

Darren Cook, spokesperson for Moneyfacts, said: “The difference in average rates between 90 per cent and 95 per cent LTV tiers has historically always been greater than differences in average rates between LTVs lower down the tier scale, so it is always worthwhile for a potential first-time buyer to try to raise an additional deposit and attempt to step down the ladder to find a deal offering a more favourable interest rate.” 

Good for FTBs 

The recent drop in rates is good news for those stepping on to the property ladder. Figures released by AmTrust in October showed that not only had the rates for products within high LTV tiers increased but the number of products available in this category had fallen.

Cook added: “First-time buyers or those borrowers seeking higher LTVs seem to have benefited the most during November, as providers appear to be once again competing for this business by driving interest rates down.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Flight cancelled or delayed? Your rights explained

With no sign of the problems in UK aviation easing over the peak summer period, many will worry whether holida...

Rail strikes: Your travel and refund rights

Thousands of railway workers will strike across three days this week, grinding much of the transport system to...

How your monthly bills could rise as the base rate reaches 1.25%

The Bank of England has raised the base rate to 1.25% as predicted – the fifth consecutive rise in just six ...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week