4th August 2015
Mortgage rates are starting to increase amid suggestions by the Bank of England governor that the base rate may start to rise at the turn of the year.
Analysis by MoneySuperMarket.com reveals there has been a rapid rise in average 60% loan-to-value rates, which now stand at 2.23%. This means it may be cheaper to go for a 65% LTV deal at an average of 2.09%.
Someone borrowing £150,000 over 25 years would pay less back over the promotional period on YBS’s 65% LTV two year fixed rate of 1.07% (fee £1,545) than on Post Office’s 60% LTV two year fix at 1.05% (but with a higher £1,995 fee).
First Direct offered 1.49% at the start of July on its best price two-year fixed, this now sits at 1.69%.
Dan Plant, consumer expert at MoneySuperMarket.com, says: “It’s prime time for those looking for a mortgage as there are still some great deals on the market – even if it’s a bit bizarre that you can currently get a cheaper deal with a smaller deposit.
“However, the recent rate rise speculation is starting to make providers cautious, and this is being reflected in their offers.
“We know choosing a mortgage can be confusing but if people can do it now, they avoid the risk of rates rising over the next few months.
“Many lenders allow mortgage holders to reserve rates available now for up to six months for a small fee, so even those who still have some time left on their current deal can benefit.”