Mortgages  

Bulk of UK mainstream 90% LTV mortgage costs fall

Bulk of UK mainstream 90% LTV mortgage costs fall

The majority of mainstream 90 per cent loan-to-value mortgages are down in cost compared with three months ago, according to the latest quarterly product data from Mortgage Brain.

The firm’s breakdown of products in the UK mortgage market (direct and broker) for a repayment mortgage is calculated by cost per ‘£000’.

The data showed a 90 per cent LTV two-year fixed-rate mortgage – with a rate of 2.94 per cent based on total to pay over two years – also costs 4 per cent less than it did three months ago and is 11 per cent less than it was in January 2015.

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This 4 per cent cost reduction for the two-year fix equates to a potential £324 annualised saving on a £150,000 mortgage over the past quarter – or £990 per year when compared to this time in 2015.

Similar cost reductions can also be found on the lowest rate three-year fixed rate and tracker products with a 90 per cent LTV.

Last month, analysis from mortgage insurer Genworth suggested that the amount of 95 per cent LTV deals had reached a post-recession high, increasing by 84 per cent year-on-year to 260 in November.

Daniel Bailey, principal at Derbyshire-based brokers Middleton Finance, agreed that 90 per cent LTV deals have become a lot more competitive over the past 12 months.

Mr Bailey said: “There are a lot of 90 per cent deals below 4 per cent now and a number of deals below 3 per cent. This is great news for first-time buyers, home movers and consumers who have high loan to value mortgages and are looking to remortgage for a better rate.”

peter.walker@ft.com