Two, three and five-year fixed rate mortgages have all dropped in cost over the past 12 months, according to Mortgage Brain’s latest product data analysis.
The fixed market has shown a big improvement in terms of cost. For example, the cost of a 90% loan-to-value (LTV) two-year fixed is now 8% lower than it was this time last year, while a 90% LTV five and three-year fixed, a 60% LTV three-year fixed and an 80% LTV two-year fixed now cost 2% less than they did at the beginning of 2018.
These particular mortgages also saw some big reductions compared to five years ago, with Mortgage Brain’s latest data showing a 24% drop in cost for the two-year fixed and a 21% and 13% fall in cost for a five and three-year fixed product.
The cost of a two, three and five-year 60% LTV fixed rate product is also down by up to 10% over the same period.
In monetary terms, the 8% reduction in cost over the past year equates to an annual saving of £612 on a £150,000 mortgage. However, compared to five years ago, borrowers could benefit from a potential annual saving of £2,214 for the 90% two-year fixed and £2,052 and £1,152 for the five and three-year products respectively.
While these favourable reductions in cost have been seen over the past year, Mortgage Brain’s analysis shows little movement, with mortgage costs for the majority of mainstream products remaining static from those offered at the beginning of October 2018.
Of those reviewed, only a two-year tracker saw a movement in cost with a 60% LTV product down by 0.5% and a 70% and 80% LTV product up by the same amount (0.5%).
Mark Lofthouse, chief executive officer of Mortgage Brain, said: “Our latest product data analysis shows that while there’s little to get excited about in terms of rate and cost movement over the past three months, the UK mortgage market has shown some big improvements over the past few years.”
“With mortgage costs down by up to 24% compared to January 2013, there are still plenty of good deals out there for first-time buyers and those looking to remortgage. 2018 saw costs and rates fluctuate, however, and I expect more of the same for 2019.”