The lowest rate two year Tracker with a 90% LTV has performed the best since the start of the year, witnessing a 31% rate drop from 3.59% in January to 2.49% as of 1st April 2014. The interest rate for the same product with a 60% LTV ratio also dropped during the past three months – down 12% from 1.69% to 1.49%.
By contrast, however, the lowest interest rate for a five year Tracker with a 60% LTV has increased by 50% since January 2014 (up from 1.99% to 2.99%), and the lowest rate 90% Tracker increased (by 3%) from 3.54% to 3.65%.
Fixed rate products also fluctuated during the first quarter of 2014. A six per cent rate drop was seen for the lowest rate five year Fixed with a 60% LTV, whereas the rate for its 90% counterpart remained static at 4.29% over the three months from January 2014.
This trend was reversed for Fixed rate products with a two year term, though, with the lowest rate 60% LTV product holding a rate of 1.48% since January 2014, and the lowest rate 90% dropping (1%) from 3.49% to 3.45%.
Despite the fluctuation in interest rates, the rate difference between LTV bands continues with the lowest 90% two year Fixed (at 3.45%) still more than twice as high – or 133% higher – than the lowest rate product with a 60% LTV (1.48%).
Similarly, the difference between the lowest rate 60% and 90% LTV two year Tracker is almost as great – 67% higher – with the lowest rates currently standing at 1.49% (60% LTV) and 2.49% for a 90% LTV product.
Mark Lofthouse, CEO of Mortgage Brain, comments:
“While interest rates have fluctuated over the past three months – bringing a mix of good news and bad news for borrowers – the longer term analysis is still very favourable with the majority of products benefiting from significant rate drops over the past 12 months.
“The lowest rate two year Tracker with a 90% LTV, for example, is now 33% lower than this time last year, which equates to an annual reduction of just over £1,800 on a £150k mortgage. Comparably, the lowest rate three year Tracker with a 90% LTV has dropped 25% since April 2013 equating to a potential annual reduction of £1,500.”
Mortgage Brain’s latest analysis also shows mixed movement over the past three months for interest rates in the buy-to-let market. The lowest two year Fixed products with 60%, 70% and 80% LTV ratios saw no movement at all since January 2014 with rates holding steady at 2.49%, 2.99% and 4.14% respectively.
Two year Trackers performed a little better with the lowest rate 80% LTV product down 8% from 4.29% to 3.95%. The lowest rate 70% LTV Tracker dropped 2% from 2.89% to 2.84% and the lowest rate 60% LTV showing no movement over the past three months at 1.99%.
