"Our latest analysis is starting to show signs that we may finally be moving away from the long period of record lows in terms of mortgage rates and costs to a period of stability, or potentially, rises."
Mortgage Brain’s January product data shows that the cost of a two year tracker at 90% LTV has gone up by 8% over the past three months. Similarly, a 90% LTV two year fix now costs 5% more than it did in October 2016.
Marginal increases of around 1% over the past quarter have also been recorded for 60% LTV two year trackers and three and five year fixed rate products, and a 2% increase for a 90% LTV three year fix.
In monetary terms, the 8% increase for the 90% two year tracker equates to an annualised increase of £576 on a £150k mortgage, and a £342 annualised increase for the 90% two year fixed product.
However Mortgage Brain's six month analysis shows the cost of mortgages to be levelling out - with a mix of small rise and falls – with long term analysis still showing strong year on year cost reductions.
Additionally, the cost of the lowest rate five year tracker (60% LTV) is now 18% lower than it was three months ago. With a current rate of 1.79%, the reduction in cost for this product equates to a potential annualised saving of £1,674.
Mortgage Brain’s longer term analysis shows strong year on year reductions spanning the past four years. The cost of a 90% LTV two year tracker, for example, is now 19% lower than it was in January 2013. 90% LTV two and five year fixed rates are both 17% cheaper, and a 60% two year tracker and two year fix are both 16% lower than they were four years ago.
Mark Lofthouse, CEO of Mortgage Brain, commented: “It’s perhaps still a little too early to predict that mortgage rates are rising and that this trend will continue. However, our latest analysis is starting to show signs that we may finally be moving away from the long period of record lows in terms of mortgage rates and costs to a period of stability, or potentially, rises.
“While our long term analysis still shows that borrowers can benefit from a number of savings, with healthy cost reductions and low rates still available, there has been a clear shift over the past three months with cost rises across the majority of products analysed.”