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Mortgage Solutions | 11 Nov 2011 | 10:56
Homebuyers borrowing at 90% LTV are paying significantly more interest on average than people taking out equivalent mortgages at 70% LTV, Defaqto has found.
According to its data based on average rates for 2, 3 and 5 year fixes and 2 year base rate tracker mortgages, homeowners borrowing at higher LTVs are charged 1% to 2% more in annual interest payments than those on lower LTV deals.
Its research showed that the average interest rate charged for a two-year tracker at 70% LTV stands at 3.36% compared to 5.35% at 90% LTV, a difference of 1.99%.
David Black, Defaqto’s insight analyst for banking said that the gap between rates on higher and lower LTVs will start to close once Bank Base Rate rises.
He said: “The low base rate has undoubtedly held mortgage rates down, but at the same time growing speculation about house price movements as well as future base rate changes makes it difficult for borrowers to make decisions with real confidence.
"However, once the base rate starts to increase it will inevitably force mortgage rates upwards.”
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... and bears have been spotted defecating in the woods! How much was paid for that fascinating piece of research?
Tick Tock
11 Nov 2011 | 11:34
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What a shock !!
Rudolph Hucker
11 Nov 2011 | 11:43
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Quite right gents! People are paid good money for telling us the patently obvious. These are the sort of non-reports that will disappear when we go through the next leg of this financial crisis - which is only moments away. And as for telling us that rates will rise. My crystal ball says that rates will not rise for at least 20 years. Japan went into the same sort of crisis 20 years ago - and look at their rates. Batten down the hatches everyone - the next tsunami is a about to hit!
Vyvyan
11 Nov 2011 | 14:38
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