The cost of mortgages has continued to fall with new data from Mortgage Brain showing further reductions in the cost of most mainstream products over the past three months.
For the second successive quarter, Mortgage Brain’s product data analysis – a breakdown of all main product types in the UK mortgage market for a repayment mortgage, and calculated by cost per ‘£000’ -, has shown a number of costs reductions for the most popular two, three and five year residential mortgages.
The cost of a two year fixed mortgage with a 60% LTV, for example, is now 3% lower than it was in July 2017, and offers borrowers an annualised saving of £198 on a £150k mortgage over the past three months.
Similarly, the lowest cost two year fixed products with a 70%, 80% and 90% LTV, are also around 3% cheaper now than they were three months ago and offer annual savings of up to £270 on a property worth £150k.
While only seeing reductions in cost ranging between 0.5% and 1% over the past quarter, the lowest price 60%, 80% and 90% LTV two year trackers still offer substantial savings compared to this time six months ago.
With a current rate of 1.84% (as of 1st October 2017), the cost of a 90% LTV tracker, for instance, is now 5% lower than it was in April and offers borrowers annualised savings of £414 on a £150,000 mortgage.
Borrowers favouring longer term deals can also benefit from the current reductions with Mortgage Brain’s data showing further falls in the cost of three and five year fixed mortgages.
The latest figures show that the lowest price 60% LTV three year fixed mortgage is now 3% lower than it was in July, while its 90% LTV counterpart is 2% lower.
A 2% reduction in the cost over the past three months has also been seen for a five year fixed (80% and 90% LTV), offering borrowers an annualised saving of £126 and £144 respectively.
Mark Lofthouse, CEO of Mortgage Brain, said: “With fresh predictions for interest rate rises to start as soon as November, the landscape is expected to change, if and when, we revert back to seeing a period of increases in the cost of residential mortgages.
“All predictions seem to imply that the increases will be low and gradual, however, so I don’t think we’ll see any sudden dramatic changes. Our latest data is still showing a number of good deals for first time buyers and those looking to remortgage, but with possible changes afoot, it will be interesting to see what the trend is at the end of the next quarter.”
