"Homeowners - particularly first time buyers or those with low deposits - are in a very good position to benefit from the current reductions in the cost of mortgages."
Its product data – as of 1st July 2016 – shows that the cost of a two year fixed mortgage at 90% LTV is now 6% lower than it was this time last year. With a current rate of 2.79% over two years the reduction in cost for this product equates to a potential annual saving of £504 on a £150k mortgage.
Similarly, a 90% LTV two year tracker (at 2.54% over two years) has also seen a 6% reduction in cost over the past 12 months equating to an annual saving of £468.
The biggest saving, however, comes in the shape of a five year tracker with a 90% LTV, which, with a current rate of 2.55%, is now 13% cheaper than it was in July 2015 and equates to a potential £1,206 annualised saving.
The majority of 60% LTV mortgages, by comparison, have remained the same or increased in cost over the same period. A two year fixed product with a rate of 1.89%, for example, now costs almost 2% more than it did this time last year, while a 90% LTV five year Fixed has seen no change in cost when compared to July 2015.
There are some positives for those with bigger deposits, however. The cost of the lowest rate five year tracker with a 60% LTV is now 7% lower than it was 12 months ago and offers borrowers a potential annual saving of £630 on a £150k mortgage.
The difference in cost between LTV bands has also reduced, with the lowest 90% two year fix costing just 5% more than the same product with a 60% LTV. This time last year the difference in cost between the two was almost 13%.
Mark Lofthouse, CEO of Mortgage Brain, commented: “Despite the Bank of England confirming that the UK’s main interest rate will be held at 0.5% there is still a lot of uncertainty about rate movement and the cost of borrowing following Britain’s decision to leave the EU. A rush of rate cuts is still predicted and our month on month analysis validates this with the cost of mortgages falling slightly compared to last month.
“Our longer term analysis, however, clearly shows that homeowners - particularly first time buyers or those with low deposits - are in a very good position to benefit from the current reductions in the cost of mortgages.”
