For example, First Direct offered 1.49% at the start of July on its best price two-year fixed, but this has now risen to 1.69%.
65% loan to value mortgages are also becoming increasingly cheaper than 60% LTVs. The current average 60% LTV rate across fixed, variable and discount mortgages is 2.23%, while the average 65% LTV rate is 2.08%. 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).
Dan Plant, consumer expert at MoneySuperMarket, said:
“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."
