The cost of mortgages at 90% and 95% loan-to-value has fallen to its lowest point in over three years, the Moneyfacts\u2019 UK Mortgages Trends Treasury Report has found.<\/p>\n
Typical 2-year fixed rates have a rate of 5.41%, the lowest since September 2022. Meanwhile the average 2-year fix at 90% LTV has dropped to 5.24%.<\/p>\n
Rachel Springall, finance expert at Moneyfacts, said: \u201cBorrowers with a limited deposit of just 5% or 10% will be thrilled to see the cost of a two-year fixed mortgage dip to a three-year low, before the \u2018mini-Budget\u2019 in September 2022.<\/p>\n
\u201cThe number of deals available to borrowers at 95% loan-to-value has also improved, with the pool of deals at its highest count since 2008. The government has been very vocal that it expects lenders to do more to boost UK growth, so the rise in choice and drop in cost is a healthy step in the right direction.<\/p>\n
\u201cHowever, deals at 95% loan-to-value only represent 7% of the residential mortgage market, so there is more room for improvement. Despite these moves, there will be borrowers who feel stuck due to a lack of supply in affordable housing.\u201d<\/p>\n
Shorter-term fixed mortgages have seen sharper falls over the past year.<\/p>\n
At the start of November 2024, the average five-year fixed rate was 5.09%; compared to the start of this month, the rate is 0.08% lower at 5.01%.<\/p>\n
However, the average two-year fixed rate has fallen by 0.45% over the same period, down from 5.39% to 4.94%.<\/p>\n
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Last week the Bank of England base rate remained at 4% following a 7-2 vote, which means reductions in mortgage rates are likely to be slow.<\/p>\n
There\u2019s also the impact of the Autumn Budget on 26 November 2025, which could see the introduction of property tax increases.<\/p>\n
Springall added: \u201cThe key date that is causing borrowers to adopt a \u2018wait and see\u2019 approach is without doubt the upcoming Budget.<\/p>\n
\u201cSo far, the rumour mill has spun out a variety of ideas which could impact borrowers from different ends of the market.<\/p>\n
\u201cOn one hand, the idea to abolish Stamp Duty Land Tax (SDLT) and an introduction of a new way of taxing could work in favour of first-time buyers, saving them thousands of pounds upfront, helping them get that crucial first step on the property ladder.<\/p>\n
\u201cHowever, like a double-edged sword, creating a new property tax that puts the burden on sellers could lead to homeowners refusing to move, hitting supply.<\/p>\n
\u201cSupply could worsen if CGT exemptions on primary residences is removed and if the yearly tax levy dubbed the \u2018mansion tax\u2019 becomes a reality.<\/p>\n
\u201cIt is essential borrowers seek advice before they make any quick decisions and not feel rushed because of the Budget rumour mill.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
The cost of mortgages at 90% and 95% loan-to-value has fallen to its lowest point in over three years, the Moneyfacts\u2019 UK Mortgages Trends Treasury Report has found. Typical 2-year fixed rates have a rate of 5.41%, the lowest since September 2022. Meanwhile the average 2-year fix at 90% LTV has dropped to 5.24%. Rachel […]<\/p>\n","protected":false},"author":1,"featured_media":5470,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2],"tags":[],"class_list":["post-5469","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-second-home"],"yoast_head":"\n