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 It is now over 6 months old so the content may be out of date.

nigel woollsey

Nigel Woollsey

Online Writer
Published: 07/02/2019
The latest research from moneyfacts.co.uk has identified that first-time buyers are benefiting from an apparent push among lenders to compete for their business. Indeed, since the Bank of England increased the base rate by 0.25% in August last year, the average two-year fixed rate mortgage on offer to those with a 5% deposit (95% loan-to-value) has dropped from 3.95% to 3.41%.

What's more, first-time buyers may be well-served focusing their attention on building societies, as it is they who seem to be making the greatest effort to court those trying to take their first step onto the property ladder. This is because the average two-year rate offered by building societies to those with a 5% deposit is currently 3.35%, some 0.10% lower than the average offered by other mortgage providers.

Average two-year fixed mortgage rate

Maximum loan-to-value


60%


70%


80%


90%


95%

All two-Year fixed rates


Aug-18


1.89%


2.35%


2.41%


2.71%


3.95%


2.53%


Feb-19


1.87%


2.49%


2.46%


2.69%


3.41%


2.49%


Difference


0.02%


0.14%


0.05%


-0.02%


-0.54%


-0.03%


Source: Moneyfacts.co.uk

Darren Cook, finance expert at Moneyfacts.co.uk, said, "Borrowers with a modest 5% deposit have seen the max 95% loan-to-value average fall from 3.95% to 3.41%, which is fantastic news for prospective first-time buyers looking to get their foot on the property ladder.

"There clearly seems to be a concerted drive by mortgage providers to try and secure the business of potential first-time buyers, who are the lifeblood of the mortgage and property markets and it is encouraging to see rates decrease as a result of some healthy competition."

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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 Any products featured may be withdrawn by their provider or changed at any time.

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