Mortgages have seen a huge development in competition at the start of this year. Many lenders have been offering their greatest ever rates for all a wide range of products from two to five year fixes and 60% -90% loan to values (LTV). And now, research conducted by a mortgage sourcing company has found the overall costs of mortgages are beginning to stabilise.
Year on year mortgage costs
The Mortgage Brain study found that mainstream mortgage costs have typically reduced from 12 months ago. Some mortgage products are as much as 4% and 5% cheaper than 12 months ago. For example, the lowest rate for a five-year fixed deal is 5% cheaper than this time last year for loans with 90% LTV. Likewise, the 60% LTV equivalent is 4% cheaper.
Furthermore, the cheapest three and two year fixed rates at 60% LTVs are also approximately 4% less than in April 2016. It is also a similar story for the 90% LTV three-year fixed product with mortgage costs down by 4%.
January to April stabilisation
Even with the year on year picture show large scale decreases, the shorter-term picture is much more stable. Whilst some products have experienced increases or decrease to overall mortgage costs rarely do they exceed +/-1%.
Two-fixed products at 60% LTV and five-year fixed at 90% LTV have decreased mortgage costs by just 1%. During the same time, 90% LTV on two and three year fixed products have fallen by just 0.2 %. It is the same for the 60% LTV on a five-year fixed rate.
Alternatively, a 60% LTV on a three-fixed rate is now 1% higher than in January 2017. Some products however, have seen no increase or decrease. Such products include the two, three and five-year tracker products on mortgages at 60% LTV.
What does this mean?
It is difficult to predict the financial markets and what it means for mortgage products long term. Without having a crystal ball, making predictions of what to come is difficult. Whilst the year on year figures are great news for those looking to re-mortgage their properties, the shorter-term figures showing stability could be a sign of potential increase in the future.
However, at this moment in time, it could also mean they are set to remain constant for a period of time. Given the uncertainty in UK politics with Brexit and the recently declared snap election, could it be, that this news mortgage cost stability is actually welcome relief during, potentially, turbulent times.
If this has encouraged you to consider the current situation relating to your own mortgage and you would like advice on re-mortgaging your home, please do not hesitate to contact us on 01536 512724. Alternatively, you could visit our contact us page to send one of the team an email or complete the contact form.