Average mortgage rates have fallen for the third consecutive month creating even more opportunities for buyers and remortgagers to take advantage of cheaper borrowing options.
Borrowers with 10% deposits are benefitting from the biggest price drops, according to the new data from Moneyfacts.co.uk, with the average two-year deal in the 90% loan-to-value (LTV) tier plunging by 0.23% in the last month.
This means the typical rate for borrowers taking out a mortgage for 90% of the property’s value is now 2.85%.
For those with more generous equity or a bigger deposit of 40% there are deals as low as 0.83% on offer. Indeed, Cumberland Building Society launched a two-year variable discounted deal with this rate – it’s lowest ever – last week.
What’s more the mutual said it had a two-year fixed rate deal for those with a 40% deposit or equity which had a rate of 0.83%, highlighting just how cheap it was to borrow for some people at the moment.
Currently the average two-year fixed rate is 2.38% for all mortgages, according to Moneyfacts’ data, while those fixing for five years could take advantage of typical rates of 2.68%.
How to find the best deal
With rates this low, borrowers are well placed to find a really competitive deal on their mortgage. The best way to ensure you were getting the full benefit of these rates cuts, according to the experts, was to speak to an adviser.
Indeed, Lewis Benson, area manager at The Cumberland, said: “We change our rates all the time because as a mutual organisation we are always trying to get the best deal for our members.
“And I can’t emphasise enough how brilliant these rates are. This is a really good time for anybody who has a mortgage to spend some time with a mortgage adviser and see if you can get a better deal.”
This advice was echoed by Eleanor Williams, finance expert at Moneyfacts.co.uk, who said: “Those looking to move will need to act quickly in their property search and those looking to remortgage could save a significant sum by taking advantage of a low-rate deal.
“Lenders are keen to take on new business and due to the market volatility, borrowers would be wise to seek independent advice to navigate the growing choice to ensure they find the most appropriate mortgage package for their circumstances.”
| Mortgage market analysis (Source: Moneyfacts.co.uk) | ||||||
| Sep-19 | Sep-20 | Aug-21 | Sep-21 | |||
| Fixed and variable rate products | Total Product Count – all LTVs | 5,053 | 2,412 | 4,660 | 4,812 | |
| Product Count – 95% LTV | 380 | 14 | 275 | 283 | ||
| Product count – 90% LTV | 774 | 62 | 563 | 579 | ||
| Product count – 60% LTV | 580 | 441 | 577 | 587 | ||
| All LTVs | Average two-year fixed rate | 2.46% | 2.24% | 2.52% | 2.38% | |
| Average five-year fixed rate | 2.79% | 2.49% | 2.75% | 2.63% | ||
| 95% LTV | Average two-year fixed rate | 3.23% | 4.48% | 3.69% | 3.57% | |
| Average five-year fixed rate | 3.64% | 4.02% | 3.93% | 3.83% | ||
| 90% LTV | Average two-year fixed rate | 2.64% | 3.32% | 3.08% | 2.85% | |
| Average five-year fixed rate | 2.95% | 3.50% | 3.41% | 3.23% | ||
| 60% LTV | Average two-year fixed rate | 1.84% | 1.77% | 1.55% | 1.51% | |
| Average five-year fixed rate | 2.18% | 2.01% | 1.79% | 1.71% | ||
| Data shown is as at the first available day of the month, unless stated otherwise. Source: Moneyfacts Treasury Reports | ||||||
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