Fixed rate and short-term tracker mortgages are seeing rates plummet across the board, though a drifting of estimates on when a rate rise will take place has left longer-term trackers struggling to keep pace, according to quarterly analysis from sourcing firm Mortgage Brain.
Figures correct as at 1 April show a 30 per cent rate reduction for the lowest rate two-year tracker with a 60 per cent loan-to-value, down from 1.44 per cent in October 2014 to a current low of 0.99 per cent.
Similarly, the mortgage rate for the same product with a 90 per cent loan-to-value is down 20 per cent from 2.49 per cent six months ago to 1.99 per cent.
Fixed rate products have seen comparable reductions over the same period, with the lowest rate two-year fix with a 90 per cent LTV now 20 per cent down on October from 3.39 per cent to 2.69 per cent.
Five-year fixes saw similar falls, with the lowest rate 60 per cent LTV product seeing a 19 per cent rate drop from 2.78 per cent to 2.24 per cent and the lowest rate 90 per cent LTV down 15 per cent from 4.24 per cent to 3.59 per cent.
The picture is slightly different for longer-term trackers, however, which would be more exposed to a series of base rate increases over the medium term, with the lowest rate at 70 per cent LTV actually showing a rate increase of 42 per cent from 1.99 per cent to 3.19 per cent.
This was the only example of a rising rate, but even at 60 per cent LTV the lowest rate five-year tracker is showing a more modest 6 per cent fall from 3.39 per cent to 3.19 per cent. The lowest rate 90 per cent LTV product holding a rate of 3.65 per cent since October.
As for the buy-to-let market, there was little change over the past six months, and what movement there was has been positive.
Mark Lofthouse, chief executive of Mortgage Brain, commented that despite repeated predictions for a rise in base rates this year there have not been any real and comparative increases in mortgage rates over the past three and six months.
He said: “Whether this will be the case in another three months’ time remains to be seen.
“What is certain, however, is that the continued rate drop will be seen as further welcome news to a lot of today’s potential homebuyers or those looking to re-mortgage.”
peter.walker@ft.com
