High LTV fixed rates have dropped by as much as 55bps between January 2014 and January 2015.
95% LTV two-year fixes have dropped from an average of 5.05% to 4.79%, while 95% LTV five-year fixes have dropped from 5.44% to 5.07%.
90% LTV two-year fixes have seen a further decrease, down to an average of 3.79% from 4.34% a year earlier.
For 75% LTVs, decreases include:
2-year fixes down to 2.01% from 2.37%
3-year fixes down to 2.82% from 2.93%
5-year fixes down to 3.09% from 3.34%
Additionally, a 75% LTV two-year variable rate mortgage has dropped from an average of 2.76% in January 2014 to just 1.64% a year later - a drop of over 40%.
Even between December 2014 and January 2015, rates saw a dramatic drop - particularly for high LTV mortgages. An average 95% LTV two-year fix dropped from 5.27% to 4.79%, while a 95% five-year fix fell from 5.43% to 5.07%.
Brian Murphy, Head of Lending at Mortgage Advice Bureau, said:
“Looking at the Bank’s latest quoted interest rates, there is no sign of any slowdown whatsoever in the mortgage price war. Lenders have begun the year with a strong appetite for growth, and newcomers are going head-to-head with established names to launch attractive new deals.
“Rising competition is pushing pricing to new lows, and it means consumers can choose from record-breaking fixed rate deals regardless of whether they have a 5%, 10% or 25% deposit. There has also been a seismic shift in the average two year variable rate at 75% loan-to-value, which has fallen by 112 basis points over the last year to 1.64%: a price cut of more than 40%.
“The next six months are shaping up to be the best-ever window to secure a low interest rate if you are looking to buy or remortgage. Today’s prices have never been bettered in modern times and given that a base rate rise is inevitable at some point, it is unlikely they will be surpassed in the years ahead.”
