Mortgage rates hit new lows as lenders widen choice for all borrowers
Competition intensifies at all LTV borrowing levels.
There’s never been a better time to get a mortgage if the latest reports on the state of the market are anything to go by.
Interest rates on mortgages have fallen to new lows according to the Bank of England and financial information website Moneyfacts.
The fall has been fuelled by intense competition in the market, which Moneyfacts says has spread out to benefit all loan-to-value- borrowing levels.
Tumbling rates
The latest Bank of England Mortgage Lenders and Administrators Return (MLAR) report found the average rate on mortgage lending has fallen to 3.01%, the lowest since the series began in 2007.
The report found that average fixed mortgage rates had fallen 0.24% to 3.13%, while variable mortgage rates had dropped 0.16% to 2.58%.
Figures from the latest Moneyfacts UK Mortgage Trends report also show rates tumbling.
The average two-year fixed rate has fallen 0.08% - the ninth consecutive monthly drop - to stand at a new Moneyfacts record of 2.87%, while the average rate on a two-year tracker mortgage has fallen 0.01% to 2.02%.
A similar pattern is apparent on longer-term deals, with the average rate on a five-year fixed rate dropping by 0.06% to 3.38%.
Cheaper mortgages for all
The drop in rates has been fuelled by strong competition between providers.
Availability of mortgage products has ballooned to record levels according to Moneyfacts, as lenders put out more and more deals to entice borrowers.
The total number of mortgage products on the market shot up by 175 this month to stand at 3,956. That's the second highest total since Moneyfacts started keeping tabs on product numbers back in 2007.
But interestingly the battle between lenders isn’t confined to one type of borrower and is being fought at all LTV levels.
Moneyfacts reported falling rates across all deposit sizes. This is a shift from the norm, as lenders have in the past targeted less risky borrowers on lower LTV bands with the greatest choice of deals often linked with the most jaw-dropping rates.
Now it seems things have changed and there’s no longer a single market that lenders are concentrating on.
Low rates not here forever
It’s worth bearing in mind that rates won’t stay this low forever and at some point they will pick up again.
Take advantage before they do. Check out the best fixed rate mortgages and the best tracker mortgages for a roundup of the best deals across a range of LTVs.
More on mortgages:
TSB launches 'breathing space' mortgages
House price rises helping second steppers
Chelsea Building Society launches tracker mortgage under 1%
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