Average mortgage rates hit 11-month low
Average mortgage rates are at their lowest level in 11 months, having fallen for three months in a row, according to Moneyfacts.
And last month they experienced the largest monthly reduction since the start of the pandemic, as lenders compete for business.
The average two-year fixed rate dropped by 0.14% to 2.38%, while the five-year equivalent reduced by 0.12% to 2.63%.
Better deals for low-deposit borrowers
Not only are the number of deals available at 90% and 95% loan-to-value far above what was on offer this time last year, but also the largest rate falls this month were recorded in the 90% loan-to-value (LTV) tier.
For borrowers with a 10% deposit, the average two-year fixed rate fell by 0.23% to 2.85% (the lowest this has been since June 2020) and the five-year equivalent reduced by 0.18% to 3.23% (the lowest since July 2020).
Eleanor Williams, finance expert at Moneyfacts, said: “September marks the eleventh consecutive month of growth in total mortgage availability as the sector demonstrates resilience in the aftermath of an unprecedented 18-months. Rising by 152 this month, there are now 4,812 options for borrowers to consider. This is almost double the amount that was on offer this time last year (September 2020 – 2,412) and the highest this total has been since March 2020 (5,222) at the onset of the pandemic.
“Those with smaller levels of deposit may be pleased to see that at 90% and 95% loan-to-value (LTV) there are now 579 and 283 products on offer, compared to just 62 and 14 this time last year when lenders had withdrawn swathes of higher risk, high LTV products. Even though availability in these top lending brackets remains below pre-pandemic levels, this month the most significant rate drops were recorded at 90% LTV, where the average two- and five-year fixed rates fell by 0.23% and 0.18% respectively.
“Those looking to move will need to act quickly in their property search and those looking to remortgage could save a significant sum by taking advantage of a low-rate deal. Lenders are keen to take on new business and due to the market volatility, borrowers would be wise to seek independent advice to navigate the growing choice to ensure they find the most appropriate mortgage package for their circumstances.”