Mortgage rates continue to drop at lower loan-to-values
Author: Andy Bedford » Publish Date: 15 October 2009
There have been so many new rates announced over the last two weeks it hasn’t been possible for me to talk about them all.
Suffice it to say, if you are remortgaging or buying your first or second property, rates across the board have dropped by as much as 0.3%.
Arrangement fees also seem to have reduced, with several of our broker best buy products now having arrangement fees below £600, against an average of £999 for most headline rates a few weeks ago.
Swap rates have dropped significantly since the massive drop in BBA LIBOR over the past two months; this has helped fuel cuts in fixed rates; there still seems to be a general lack of movement on rates at higher loan-to-values for borrowers looking to remortgage.
Fixed rates at 85% loan-to-value; for example, continue to sit around the 5.99% mark with little movement.
It will be interesting to see who makes the first move on this market of higher loan-to-value remortgage borrowers (if indeed there is any drop at all); it seems almost as if the pot is so big that banks are scared to dip their toe in the water in case they get swamped.
It certainly can’t be claimed that a remortgage at 85% is a greater lending risk than a purchase at the same loan-to-value, yet you could get a much better rate if you were buying at this LTV.
Mortgage Advisors will be keeping their eyes peeled for changes on these higher LTV products; hopefully, the news that interest rates are likely to remain low in the long term will help to drive swap rates down further and one of the big banks into releasing some decent remortgage rates for those with little equity.
And if you’re listening, a 95% purchase product wouldn’t go amiss either!