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Moneyfacts: Mutuals help to assist the first-time buyer market

  • Contact: Anonymous
  • Created date: 26 June 2019

Release from Moneyfacts

Despite the Bank of England base rate rise of 0.25% to 0.75% in August 2018, research from Moneyfacts has shown that the overall average two-year fixed mortgage rate has fallen by 0.03% from 2.53% in August 2018 to 2.50% today. 

Furthermore, research from Moneyfacts’ new improved version of its Residential Mortgage Analyser shows that the average two-year fixed rate at maximum 90% loan-to-value (LTV) has fallen by 0.07% to 2.68% over the same period. Within this, the average rate offered by building societies stands at 2.62%, which is 0.06% below the sector average, while the average rate offered by non-mutuals is currently 2.79%, 0.11% above the average. 

Darren Cook, Finance Expert at Moneyfacts, said:

“There clearly seems to be a concerted drive by both building societies and non-mutuals to try and secure the mortgage business of potential first-time buyers, who are the lifeblood of the property market. It is encouraging to see that potential first-time buyers could be benefiting from some healthy competition between mortgage providers and being aided by reduced mortgage rates.

“Moneyfacts has drilled the average mortgage rates down a little further using its new improved version of its Residential Mortgage Analyser and ascertained that building societies not only have tailored underwriting processes that may suit first-time buyers, but the average two-year fixed mortgage rate at max 95% LTV offered by building societies is currently 3.35%, 0.10% lower than the average offered by other mortgage providers. Moving away from the higher tiers however, the average rate for max 60% LTV offered by building societies is currently 1.95%, 0.09% higher than the non-mutuals. 

“Further still, 113 products – 31% of all products available – at maximum 90% LTV two-year fixed are available through building societies, with the remaining 257 (69%) offered by other mortgage providers. At the maximum 95% LTV tier, however, 82 products (43%) are offered by building societies and 110 products (57%) are available through the rest of the market, again showing building societies’ willingness to compete for the business of first-time buyers.”

Click here to view the Moneyfacts Residential Mortgage Analyser brochure.