Mortgage costs down during Q1 2018
23 April 2018
Cost of 80% and 90% LTV 2yr Tracker down 3% since January 2018
2yr Fixed (90% LTV) now 2% lower
5yr Fixed bucks the trend with marginal cost increases
UK, APRIL 23, 2018: Despite the current surge of lenders increasing mortgage rates in anticipation of a potential base rate rise, Mortgage Brain’s latest quarterly product data analysis shows that the cost of most mainstream mortgages are down compared to the start of the year.
The cost of a two year Tracker (80% and 90% LTV), for example, now costs 3% less than it did at the start of January 2018. The same product with a 70% LTV is now 2% lower and its 60% LTV counterpart is now 1% lower over the same period.
With a rate of 1.59% and 1.97% respectively (as of 1st April 2018), the 3% reduction in cost for the 80% and 90% two year Tracker equates to an annualised saving of £234, while the 2% cost reduction for the 70% LTV product offers a potential annualised saving of £180 on a £150k mortgage.
Mortgage Brain’s analysis – a breakdown of all main product types in the UK mortgage market for a repayment mortgage and calculated by cost per ‘£000’ – also shows a 2% reduction in the cost of a 90% LTV two year Fixed product, and a 60% LTV three year Fixed.
There are a few products that have bucked the trend, however, with Mortgage Brain’s data showing a few marginal increases of around 1% for a 70, 80 and 90% LTV five year Fixed rate mortgage.
A 60% LTV two year Fixed leads the pack though, witnessing a 2% increase in cost compared to January, and 6% up in cost compared to this time in October 2017. With a rate of 1.83% (at 1st April 2018), this equates to an annualised increase of £144 over three months or £378 over six months.
Mark Lofthouse, CEO of Mortgage Brain, comments, “Having seen month on month increases during the last quarter of 2017, it’s all change once again with the cost of most mainstream mortgages falling over the past three months.
“We are seeing a number of lenders starting to increase their rates ahead of the likely base rate rise next month, however, so it could well be back to reporting on a wave of cost increases at the end of June.”
