Eleanor Williams, Finance Expert at Moneyfacts, said:
“Recent competition in the mortgage sector saw the launch of record-low initial rates as providers competed for predominantly low risk business from borrowers with higher deposits or levels of equity and which saw average rates reduce. However, the start of November marks a reverse in the average rate cut trend; while still lower than their year-on-year equivalents, the overall average two- and five-year fixed rates have increased for the first time since June, with both rates rising by 0.04%.
“This can be attributed to rate re-pricing in the lower-LTV tiers, where we recorded increases in the average fixed rates in each of the LTV brackets at 75% and lower this month. The most noteworthy shifts were recorded at 65% LTV where the two-year fixed average went up by 0.39% and the five-year equivalent by 0.38%, to 2.50% and 2.70% respectively. This two-year average is now the highest we have recorded since June 2013 when it reached 2.77%.
“In contrast to this, borrowers with smaller deposits or amounts of equity who may have spent much of the past 18 months with few options available to them have seen continued improvements in the level of choice on offer this month, with the number of products on offer at 90% LTV and above at its highest level since March 2020. There were also further reductions in the average rates in these higher LTV tiers, where, following a 0.10% month-on-month reduction, at 3.22% the average two-year fixed rate at 95% LTV is now the lowest it has been since February 2020.
“As the market remains unsettled, borrowers may consider this an opportune time to explore securing a new deal, as there is no guarantee that rates will not continue to increase in the months to come. Seeking out independent financial advice to assess the changing market is vital to ensure the best possible deal can be secured considering the rate, associated fees and incentives.”
Eleanor Williams, Finance Expert at Moneyfacts, said:
“Recent competition in the mortgage sector saw the launch of record-low initial rates as providers competed for predominantly low risk business from borrowers with higher deposits or levels of equity and which saw average rates reduce. However, the start of November marks a reverse in the average rate cut trend; while still lower than their year-on-year equivalents, the overall average two- and five-year fixed rates have increased for the first time since June, with both rates rising by 0.04%.
“This can be attributed to rate re-pricing in the lower-LTV tiers, where we recorded increases in the average fixed rates in each of the LTV brackets at 75% and lower this month. The most noteworthy shifts were recorded at 65% LTV where the two-year fixed average went up by 0.39% and the five-year equivalent by 0.38%, to 2.50% and 2.70% respectively. This two-year average is now the highest we have recorded since June 2013 when it reached 2.77%.
“In contrast to this, borrowers with smaller deposits or amounts of equity who may have spent much of the past 18 months with few options available to them have seen continued improvements in the level of choice on offer this month, with the number of products on offer at 90% LTV and above at its highest level since March 2020. There were also further reductions in the average rates in these higher LTV tiers, where, following a 0.10% month-on-month reduction, at 3.22% the average two-year fixed rate at 95% LTV is now the lowest it has been since February 2020.
“As the market remains unsettled, borrowers may consider this an opportune time to explore securing a new deal, as there is no guarantee that rates will not continue to increase in the months to come. Seeking out independent financial advice to assess the changing market is vital to ensure the best possible deal can be secured considering the rate, associated fees and incentives.”
