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UK Mortgage Interest Rate Fall Below 6.00%

Housing-Market / Mortgages May 09, 2011 - 06:29 AM GMT

By: MoneyFacts

Housing-Market

The average rate for would be mortgage borrowers with just a 10% deposit has fallen below 6.00% for the first time since March 2008.

Today the average rate for a two year fixed mortgage at 90% LTV stands at 5.98%, 0.40% lower than a year ago.


While all LTV rates have fallen compared to this time last year, it is the 90% LTV tier that has seen the biggest fall.

LTV

Average Rate
May 2010

Average Rate
May 2011

Change

90%

6.38%

5.98%

-0.40%

75%

4.21%

4.02%

-0.19%

60%

4.06%

3.91%

-0.15%

Source: Moneyfacts.co.uk 9.5.11

Over the same period, the number of deals available to borrowers with a 10% deposit increased by 41% to 229.

The number of lenders offering 90% LTV deals also increased from 31 in May 2010 to 48 today.

Michelle Slade, spokesperson for Moneyfacts.co.uk, commented:

“Over the last year lenders have witnessed increased consumer demand for a return of 90% LTV mortgages, it has taken some time, but it appears they are finally listening.

“The increased competition in the 90% LTV tier has resulted in a large reduction in rates compared to the same time last year, even though base rate has stagnated.

“The news will be a boost to first time buyers who have been left with limited options in the last few years.

“Skipton Building Society has provided further help to those borrowers with just a 5% deposit as it became the first lender to offer rates lower than 6.00%, without the need for a guarantor, since the peak of the credit crisis.

“While the mortgage market continues to show improvements for those with smaller deposits, the picture isn’t entirely rosy.

“Just because the products are on the shelf doesn’t mean that they are within easy reach.

“Mortgage availability may be improving, but mortgage approval figures remain subdued.

“The mortgage market still has a way to go before it returns to any sort of ‘normality’.”

www.moneyfacts.co.uk - The Money Search Engine

Moneyfacts.co.uk is the UK's leading independent provider of personal finance information. For the last 20 years, Moneyfacts' information has been the key driver behind many personal finance decisions, from the Treasury to the high street.


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