The table below shows the lowest mortgage rate five years ago for 60% LTV was 2.99% compared to today’s equivalent mortgage, which charges just 1.48%. After working out the true cost of the mortgage including fees and introductory offers and based on a £150,000 mortgage over 25 years, today’s borrower is saving almost £800 (£788.96).

This saving falls into insignificance when compared to that of the first time buyer at 90% LTV. Five years ago the best rate that could be found was 5.99%. Today that has fallen to 3.45%, making a true cost saving of £5,046.88 over the two year term.

Sylvia Waycot, Editor at Moneyfacts.co.uk, said:

“In 2009, no one would have dreamed that mortgage rates would fall to their present low and stay that way for five years. .

“The saving on a two year mortgage today compared to 2009 is literally thousands of pounds for a first time buyer.

“However, wonderful though it is to be paying less for a mortgage, the current base rate is not the norm and rates will rise eventually. First time buyers particularly need to be aware of over stretching themselves financially and the new rules due to start in April that ensure lenders make sure potential borrowers can afford a rate rise will help with this.

“Of course, had it not been for the Help to Buy initiative, first time buyer rates would not be looking so good, as for the majority of the past five years this category of borrower has been shunned by lenders as far too risky.

“It is only now that the mortgage market, which has been closed for five years to all but the 60% market, is once again open for business.”

www.moneyfacts.co.uk - The Money Search Engine

Moneyfacts.co.uk is the UK's leading independent provider of personal finance information. For the last 20 years, Moneyfacts' information has been the key driver behind many personal finance decisions, from the Treasury to the high street.

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