A new study suggests that mortgage costs across the UK are falling – a trend that is expected to continue well into the near future.
According to the latest quarterly product data analysis from market analysts Mortgage Brain, there has been a ‘slight drop’ in two-year fixed deals with loan-to-value (LTV) ratios of 60, 70 and 80 per cent.
The average cost of a two-year fixed deal with a 70 per cent LTV fell by two per cent over the three months to July 2017 – while the cost of 60 and 80 per cent LTV deals has fallen on average by one per cent.
The group’s report suggests that borrowers can now effectively benefit from annual savings of up to £400 from an average two-year fixed deal with a 70 per cent LTV.
Meanwhile, the average cost of a five-year fixed-rate mortgage with a 70 per cent LTV has fallen by around two per cent, the report reveals, while five-year fixed deals with a 60 per cent LTV experienced fall of around one per cent during the same period.
Mark Lofthouse, CEO of Mortgage Brain, said that borrowers “looking to take out a mortgage today” would benefit from significantly from “lower monthly repayments”.
He said: “Although the reductions in costs over the past three months are relatively small, they do follow a period of stability and should be welcome news to a lot of today’s potential homebuyers or those looking to re-mortgage.
“Our longer term analysis of the most popular mainstream mortgages also shows a strong mix of rate and cost reductions,” he added.
Other industry commentators have described the current market as “very competitive” and have stressed that there is “no real weight” behind the flawed argument that interest rates might rise in coming months.