There has been a further widespread drop in mortgage rates for all main product types over the second quarter of this year, despite repeated predictions for a rise in base rate, according to the latest figures from Mortgage Brain.
As of 1 July there has been an 11 per cent rate reduction over the past three months, with the lowest rate two-year fixed product with a 60 per cent loan-to-value now standing at 1.05 per cent - down from 1.18 per cent in April.
Mortgage Brain’s data showed that the same product with a 90 per cent LTV - now at 2.48 per cent - saw a rate reduction of 8 per cent, from 2.69 per cent in April.
Three-year fixes saw similar reductions over the past quarter, with the lowest rate 80 per cent LTV product down 35 per cent from 2.29 per cent to 1.49 per cent and the lowest rate 60 per cent LTV product down 12 per cent from 1.78 per cent in April to 1.57 per cent at the beginning of July.
The biggest rate drop for trackers was in the lowest rate five-year product with an 80 per cent LTV, which dropped 29 per cent from 3.65 per cent to 2.59 per cent.
The lowest rate two-year tracker with a 60 per cent LTV, despite dropping by just 1 per cent over the past three months, now offers the best overall rate available at 0.98 per cent.
Mark Lofthouse, chief executive of Mortgage Brain, commented that historically, products with a 90 per cent LTV ratio led the field in terms of rate drops, however, current data is showing that products with a 60 per cent LTV are starting to take the charge.
Meanwhile, the buy-to-let market continued to show little movement in terms of rate adjustments over the past three months.
The lowest rate five-year fixed products with a 60, 70 and 80 per cent LTV are all holding steady, with rates static compared to three months ago - 3.29, 3.69 and 4.45 per cent respectively.
A 21 per cent rate drop was seen for the lowest rate three-year tracker with a 60 per cent LTV, which is down from 3.25 per cent to 2.56 per cent, while the lowest rate five-year tracker with a 60 per cent LTV dropped for the first time in over 12 months, down 14 per cent to 3.39 per cent, from 3.95 per cent.
In mid-July, Mark Carney, Bank of England governor, warned that interest rates could rise by the “turn of the year”, emphasising a rise is needed to return inflation to the 2 per cent target.
peter.walker@ft.com
