Weekly rate watch: Dramatic rises and falls occur - Mortgage Strategy

There was movement across all major LTV bands in the fixed mortgage rate market after a hectic week, shows data from Moneyfacts.

Rates dropped in the two-year and five-year categories while the average rate for a three-year fix went up. Only the ten-year fixed rates remained static overall.

Two-year fixes

The average two-year fix across all LTV tiers stood at 2.40 per cent as of 20 March, down from the 2.43 per cent noted the Friday before.

Within the 95 per cent LTV category, the average rate increased from 3.36 per cent to 3.27 per cent and held steady at 2.56 per cent in the 90 per cent LTV band.

However, in the 85 per cent LTV area the average rate plummeted from 2.49 per cent to 2.43 per cent.

Falls were also seen in the 80 per cent LTV category, from 2.40 per cent to 2.38 per cent, the 75 per cent LTV tier, from 2.29 per cent to 2.25 per cent, and within the 70 per cent tier, from 2.52 per cent to 2.50 per cent.

The average rate remained at 1.98 per cent in the 65 per cent LTV category, at 1.80 per cent at 60 per cent LTV, and 2.19 per cent at 50 per cent LTV.

Three-year fixes

In this area, the average fix across all LTVs grew from 2.52 per cent to 2.54 per cent.

There were increases at 95 per cent LTV – from 3.51 per cent to 3.55 per cent – 90 per cent LTV, from 2.77 per cent to 2.78 per cent, the 85 per cent LTV tier, from 2.35 per cent to 2.41 per cent, the 80 per cent LTV, from 2.39 per cent to 2.40 per cent, in the 75 per cent LTV, from 2.06 per cent to 2.15 per cent, and in the 60 per cent LTV space, from 2.14 per cent to 2.15 per cent.

Rates remained at 2.40 per cent in 70 per cent LTV, 1.70 per cent at 65 per cent LTV, and 3.45 per cent at 50 per cent LTV.

Five-year fixes

As stated at the beginning of the story, here rates fell. This time last week the average rate across all LTVs was 2.73 per cent. It has since dropped to 2.71 per cent.

At 95 per cent LTV the rate crept up from 3.57 per cent to 3.58 per cent, but things quickly changed.

At 90 per cent the average rate dropped from 2.91 per cent to 2.90 per cent, at 85 per cent LTV from 2.80 per cent to 2.74 per cent, at 80 per cent LTV from 2.71 per cent to 2.68 per cent, at 75 per cent LTV from 2.57 per cent to 2.52 per cent, at 70 per cent LTV, 2.87 per cent to 2.85 per cent, and at 65 per cent LTV from 2.24 per cent to 2.18 per cent.

At 60 per cent LTV the rate remained at 2.11 per cent and at 50 per cent LTV, at 2.54 per cent.

Ten-year fixes

The average fixed rate across all LTVs stayed at 2.71 per cent this week, with all rates across all categories untouched by the wider economic picture.

Moneyfacts finance expert Eleanor Williams says: “We are still seeing the impact of the first base rate cut last week, filtering out through numerous reductions to variable tracker mortgages. Following the further base rate reduction yesterday [Thursday 19 March], it will remain to be seen if, or how much of this, might be passed on to new borrowers.

“A couple of other notable changes this week came from Leeds Building Society who made reductions of as much as 0.25 per cent to a selection of its fixed rate products and also launched new 65 per cent LTV 5five-year fixed rates too. TSB has also launched new deals for remortgage customers (via Intermediaries) with two and five year fixed rates at 60 per cent and 75 per cent LTV.

“While those consumers who are currently on a tracker mortgage or are perhaps sitting on their lenders SVR may shortly benefit from a reduction to their current monthly mortgage repayments, one has to wonder if the current situation will continue for long or how much of this second base rate reductions can be passed on. If a borrower is concerned about volatility of interest rates, they may want to consider locking into a fixed deal whilst rates are so low. The same could well be true for those who are looking to remortgage soon also.”

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Weekly rate watch: Dramatic rises and falls occur - Mortgage Strategy
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