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Residential mortgages see ‘big’ cost reductions in 12 months – Mortgage Brain

  • 15/01/2020
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Residential mortgages see ‘big’ cost reductions in 12 months – Mortgage Brain
The cost of a two-, three- and five-year fixed mortgage has seen reductions of up to 5.7 per cent in the last 12 months, analysis from Mortgage Brain has found.


According to the data, the cost of a typical 60 per cent loan to value (LTV), five-year fixed deal is 5.7 per cent lower than it was this time last year, while a 60 per cent LTV two-year fixed is 4.1 per cent lower.  

Figures from the fintech firm’s quarterly data found that for a 60 per cent LTV five-year fixed mortgage, this equated to an annual saving of £432 on a £150,000 mortgage while the equivalent two-year mortgage would be £345.60 less. 

Meanwhile, 80 per cent LTV two- and five-year fixed rate products both now cost 3.2 per cent less than they did at the beginning of January 2019. 


Five year dip 

As well as seeing annual declines, Mortgage Brain’s data found that costs had fallen significantly over the past five years with the typical cost of two-year fixed 60, 70, 80 and 90 per cent LTV products falling by between 9.8 and 17.8 per cent. 

For the five-year equivalents, the products had seen drops of between 12.1 per cent and 14.4 per cent over the half-decade. 

Compared to a £150,000 mortgage in 2015, this represented potential annual savings of £1,584 for the 90 per cent two-year fixed, and £1,206 and £882 for the five- and two- year 60 per cent LTV products respectively. 

Despite the drop in costs seen over the past 12 months, Mortgage Brain found the majority of mortgage product offerings saw little change since the beginning of October 2019. 

Mark Lofthouse (pictured), CEO of Mortgage Brain, said: “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.  

“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.” 

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