If you're a first-time buyer, your deposit probably won't be that large – but that doesn't mean you don't want to benefit from the record low mortgage rates currently available. Well, you're in luck, because research from the Nottingham Building Society has revealed that those with low deposits are actually benefiting from bigger rate cuts!
The figures show that the biggest cuts in the last few months have been for borrowers looking for 90% loan-to-value (LTV) deals, with the average fixed rate at this level falling from 4.37% in November 2014 to 3.49% at the end of March – a drop of 0.88%. On a mortgage of £150,000, this would save around £1,300 per year in interest payments.
Average rates elsewhere in the higher end of the LTV spectrum have also fallen, but not to quite the same extent (the average fixed rate 75% LTV rate fell by 0.84% over the same period, while the average 85% LTV fell by 0.64%). This means that those with only a 10% deposit can take advantage of truly exceptional rates, with providers actively competing to secure this kind of business. It's this competition that's fuelling such substantial rate cuts, and you get to benefit to the tune of £1,300 per year – a huge saving!
What's more, Ian Gibbons of Nottingham Mortgage Services said that competition is likely to remain "intense", and that those searching the market should be able to source highly competitive deals. Rates are continuing to fall, too, so it's time to get searching – check out our pick of the top mortgages for first-time buyers if you're thinking of taking the plunge, or use our mortgage calculator to see just how much you could save.
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