High-LTV mortgage rates still above 2022 mini-budget levels

The lowest mortgage rates are now on par or lower than where they sat before the mini-budget sent rates rocketing in September 2022, according to new analysis by L&C Mortgages.

That is despite the fact that the Bank of England base rate had only just increased to 2.25% before the mini-budget, whereas it currently stands at 5%.

L&C looked at the average of the top ten lenders’ best rates on offer to homebuyers and remortgage borrowers on the morning of the mini-budget, one month after, and where they sit now.

In the case of the lowest average two-year fixed rate for homebuyers, mortgage rates are now over two percentage points lower than where they spiked to in October 2022, at 4.13% compared to 6.16%.

However, the average rates for those buying with a smaller 10% deposit are still slightly higher than before the mini-budget. For example, the average two-year fixed rate at 90% LTV is now 5.06% compared to 4.57% in September 2022.

David Hollingworth, associate director at L&C Mortgages, commented: “The mortgage market has seen bouts of huge volatility in the last two years so it’s encouraging for borrowers to see that rates are now in a much better place. Even though the base rate is more than twice its level prior to the mini-budget, mortgage rates are largely back to where they were.

"More importantly the market has shown much more stability and is a world away from the skyrocketing rates post mini-budget, allowing homemovers and remortgage borrowers to look ahead with greater certainty.”