Borrowers with low deposits see biggest rate cuts! - Mortgages - News - Moneyfacts

News

Borrowers with low deposits see biggest rate cuts!

Borrowers with low deposits see biggest rate cuts!

Category: Mortgages

Updated: 01/06/2015
First Published: 01/06/2015

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

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.

What next?

Mortgage calculator

Top mortgage deals

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

The time is now for remortgaging

Mortgage borrowers have been urged to review their existing deals after it was revealed that remortgage opportunities continue to flourish in the post-Brexit vote world.

Goodbye to the Help to Buy Guarantee

On 31 December, phase two of the Help to Buy initiative will be withdrawn from the market. It’s certainly done wonders for the high loan-to-value sector, so we thought we’d take a closer look at the significance of the scheme and the effect it’s had.

Remortgaging bounces back

Remortgaging has been enjoying a welcome boost in recent months, despite September’s slight dip, with many homeowners capitalising on record low mortgage rates to boost their finances.
 
Close