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

Mortgage rates hit ‘historic lows’ as deal choice halves

Written by: Shekina Tuahene
The average mortgage interest rate has fallen to lows not seen since data site Moneyfacts began its electronic records in June 2007, the firm said.

The average overall two-year fixed rate is now 2.09 per cent and the average rate for five-year fixes across all loan-to-values (LTVs) has fallen further than last month’s low of 2.66 per cent to 2.35 per cent, according to the Moneyfacts UK Mortgage Trends Treasury Report.

The average rate for a two-year fixed at 75 per cent LTV has decreased from 2.29 per cent on 1 March to 1.97 per cent on 1 May. As for the five-year equivalent, the average rate sits at 2.20 per cent, down from 2.56 per cent in March. 

A two-year fixed at 90 per cent LTV has gone down to 2.40 per cent from 2.57 per cent, while a five-year fixed at 90 per cent LTV is now 2.65 per cent from 2.91 per cent. 

Rates at the 95 per cent LTV tier have risen however, with the average rate for a two-year fixed at 3.36 per cent up from 3.26 per cent, and the average five-year fixed at 3.62 per cent up from 3.58 per cent. 

However, there is less choice available as the number of mortgage deals on the market have reduced by more than half since March, when there were 5,222 deals available to customers. 

As of May, there were just 2,566 residential mortgage deals on the market. 

Small deposit borrowers hit 

Borrowers with smaller deposits are most affected, as the Moneyfacts data suggested 843 of the two- and five-year fixed mortgage products which were pulled had LTVs of 75 per cent and higher. 

There are now just 22 two- or five-year fixed mortgage deals at 95 per cent LTV and 50 deals at 90 per cent LTV. 

Eleanor Williams, of Moneyfacts, said: “This recent, precipitous fall in product numbers can in part be attributed to lenders initially needing to focus operational resource on supporting their existing customers and managing the volume of mortgage payment holiday requests rather than looking to take on further new business.  

“We are now beginning to see lenders relaunching products within their ranges, and some providers have eased the LTV caps they put in place early in the crisis. Mortgage lenders are still open for business and, for those eligible, rates are low.” 

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

It’s time to get your finances in shape for summer, and moving your cash savings to a higher paying deal is ...

Everything you need to know about being furloughed

Few people had heard of ‘furlough’ before March 2020, but the coronavirus pandemic thrust the idea of bein...

The experts’ guide to sorting out your personal finances in 2021

From opting to ‘low spend’ months to imposing your own ‘cooling-off period’, industry experts reveal t...

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

Read previous post:
Furlough scheme ‘to be extended until September’

The UK’s Job Retention Scheme is to be extended until the end of September but at a reduced rate of...