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

Good news for borrowers as mortgage costs fall

Written by: Antonia Di Lorenzo
Mortgage costs fell again over the second quarter of 2018, data showed.

For the second quarter in a row, analysis by mortgage business, Mortgage Brain, has shown cost reductions for two-, three- and five-year residential mortgages.

The cost of a two-year fixed mortgage with a 90% loan to value (LTV), for instance, is now 8% lower than it was in April 2018, and offers borrowers an annual saving of £576 on a £150,000 mortgage.

The same product with a 60% LTV now costs 3% less than it did at the start of April, as does the lowest rate 90% LTV five-year fixed rate product, at 2.19% as of 1st July 2018.

With a current rate of 1.44%, the cost of a two-year tracker with 80% LTV is now 2% lower than it was over the same period. A 60% LTV three- and five-year fixed are both 1% lower than they were in April.

According to Moneyfacts, the average two-year fixed mortgage rate last week was at 2.5332%, up from 2.5244% in June and against 2.2551% at the same time last year.

Healthy position

Mortgage Brain’s longer-term analysis also revealed that the residential mortgage market is still in a healthy position compared to this time last year. Cost reductions have been recorded for the majority of mainstream products over the past 12 months.

The cost of the 90% LTV two-year fixed deal is now 10% lower than it was at the start of July 2017. A five-year fixed with 90% LTV is now 5% lower compared to this time 12 months ago, while a 4% reduction in cost has been recorded for a 90% LTV two-year tracker.

Mark Lofthouse, CEO of Mortgage Brain, said: “With fresh predictions for interest rates to rise again next month, the landscape could once again be on the verge of change, if and when, we revert back to seeing a period of increases in the cost of residential mortgages.

“As before though, most predictions imply that the increases will be low and gradual so dramatic changes shouldn’t be seen short term.

“Our latest data is still showing a number of good deals for first-time buyers and those looking to remortgage but with possible changes on the horizon, the picture might look different at the end of the next quarter.”

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.

The savings accounts paying the most interest

If one of your jobs this month is to get your finances in order, moving your savings to a higher paying deal i...

Coronavirus and your finances: what help can you get?

News and updates on everything to do with coronavirus and your personal finances.

Everything you need to know about being furloughed

If you’ve been ‘furloughed’ by your company, here’s what it means…

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.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

  • @YourMoneyUK All you need to know about the latest Current Account Switching winners and losers - hats off to Starl…
  • RT @WeareJust_PR: Many people struggling to make ends meet may not realise they are entitled to financial help or find the system too confu…
  • RT @WeareJust_PR: Many people struggling to make ends meet may not realise they are entitled to financial help or find the system too confu…

Read previous post:
Lifeline for free-to-use ATMs

Concerns over the future of free-to-use ATMs have been eased for now after cash machine network LINK announced it was...