Average two-year rate drops two basis points: Moneyfacts

The average two-year fixed rate has fallen by two basis points, according to data collected by Moneyfacts.

The rate currently stands at 2.47 per cent, down from the 2.49 per cent recorded last week.

However, this time last year, the average two-year fixed rate was eight basis points lower, at 2.39 per cent.

Moneyfacts says that within the 95 per cent LTV category, the average rate has fallen 0.4 per cent, from 3.7 per cent to 3.3 per cent.

In addition, the average rate within the 90 per cent LTV has fallen from 2.68 per cent to 2.65 per cent, the rate within the 85 per cent LTV category has fallen from 2.49 per cent to 2.47 per cent, and in the 75 per cent LTV category, from 2.34 per cent to 2.33 per cent.

In contrast, the average two-year fix rate in the 70 per cent LTV category has increased from 2.47 per cent to 2.49 per cent.

The average rate within the 80 per cent LTV, 65 per cent LTV, 60 per cent LTV and 50 per cent LTV remain unchanged.

Moneyfacts finance expert Darren Cook comments: “Lenders are seeking to reduce the margins between the 95 per cent LTV and the 90 per cent LTV categories.

“The number of new 95 per cent LTV products has not increased, which shows that lenders are undercutting competition in this category, rather than introducing new lower rate offerings.

“Within the higher LTVs there is greater margins which means lenders are able to make more cuts – the lower LTVs have seen little to no change.”

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