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Mortgage borrowers benefit from two-year fixes drop

  • 23/09/2019
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Mortgage borrowers benefit from two-year fixes drop
Mortgage borrowers are continuing to see stiff competition in the mortgage market with the average two-year fixed mortgage rate dropping from 2.464 per cent to 2.440 per cent in the last month, while the average five-year fixed mortgage rate has dipped from 2.786 per cent to 2.739 per cent during the same period.


The largest rate reduction over this period was recorded in the five-year maximum 75 per cent and 80 per cent loan to value (LTV) product sector, according to information released by price tracking website, which fell by 0.07 per cent to 2.57 per cent and 0.08 per cent to 2.70 per cent respectively. 

Borrowers wanting to take out a smaller loan through the lower tiers have also been benefiting from a fall in rates.

Those with just a five per cent deposit, however, have seen average two-year 95 per cent LTV rate rise by 0.03 per cent to 3.26 per cent and its five-year counterpart increase by 0.01 per cent to 3.64 per cent.

Darren Cook, finance expert at Moneyfacts, said: “With the historic two-year fixes coming to an end this month, this may perhaps explain further why lenders are focussing on the lower-LTV tiers when competing on margins. 

“Not only do mortgage providers need to compete for new business, but they also need to keep an eye on retaining their existing borrowers, keeping in touch with competitors’ mortgage rates to ensure that current customers consider their existing borrower products as their first option to remortgage.”

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