Fixed mortgages sink to their cheapest rates for 45 months

Julian Harris
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MORTGAGE rates on high loan-to-value deals have sunk to their lowest point since January 2008.

Loans worth 90 per cent of the value of the acquired property are available at an average of 5.39 per cent on a fixed two year rate, the website Moneyfacts has claimed.

The average rate has tumbled from 6.05 per cent on the same deal six months ago, as global economic woes appear to have stamped out any chance of the Bank of England raising interest rates in the near term.

A five year mortgage of 90 per cent loan-to-value can be obtained at an average rate of 5.87 per cent, the data also showed – a whole percentage point lower than the typical interest rate six months earlier.

“The availability of higher loan-to-value mortgage products has increased over the past couple of years,” said Louise Holmes of Moneyfacts.

“Lenders have begun to launch more competitive products to borrowers who during the height of the credit crisis had pretty much given up on the prospect of owning their own property,” she added, warning that rates would likely rise at the first sign of a higher Bank rate.