Two, three and five-year fixed rate mortgages have all dropped in cost over the past 12 months, and witnessed some big reductions compared to five years ago, according to Mortgage Brain’s latest data analysis.
The cost of a 60% loan-to-value (LTV) five-year fixed, for example, is now 5.7% lower than it was this time last year, while a 60% LTV two-year fixed is now 4.1% lower.
Meanwhile, 80% LTV five and two-year fixed rate products now cost 3.2% less than they did at the beginning of January 2019.
Mortgage Brain also saw a big improvement in terms of cost compared to five years ago, with data showing reduction in cost for the two-year fixed 60, 70, 80 and 90% LTV products of between 9.8% and 17.8% and a 12.1% to 14.4% fall in cost for the equivalent five year fixed products.
In monetary terms, the 5.7% reduction in cost over the past 12 months equates to an annual saving of £432 on a £150,000 mortgage.
However, compared to five years ago, borrowers can secure a potential annual saving of £1,584 for the 90% two-year fixed, and £1,206 and £882 for the five and two-year 60% LTV products respectively.
While the past 12 months have seen favourable reductions, Mortgage Brain’s analysis shows little movement on a short-term basis, with mortgage costs for the majority of mainstream products remaining broadly the same as those offered at the beginning of October 2019.
Mark Lofthouse, chief executive officer of Mortgage Brain, comments: “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 seen some big cost reductions over the year and particularly over the last five years.”
“With mortgage costs down by up to 17.8% compared to January 2015, there are savings across the board that advisers are able to offer their customers. Mortgage costs remain at historic lows and forecasters are predicting that this will continue in to 2020.”