UK mortgage rates falling

British mortgage rates continued to fall during September for home-owners who had large deposits, figures showed today.

The average cost of a two-year fixed-rate mortgage for someone borrowing 75% of their home’s value dropped from 6.08% to 5.93% during the month to reach its lowest level since March, according to the Bank of England.

Five-year fixed-rate deals for people with a 25% deposit fell by 0.25% to also reach a six-month low of 5.84%, while tracker deals for this loan-to-value (LTV) ratio dropped by 0.6% to average 6.14%.

But the news was less good for people with just a 5% deposit, with the cost of five-year fixed-rate deals for these borrowers remaining unchanged.

For the fifth month running, there were not enough two-year fixed-rate mortgages for a 95% LTV to be included in the figures.

Financial information group Moneyfacts.co.uk said there were now just 43 different fixed-rate mortgages for people with only a 5% deposit and 18 discount or variable ones, down from 1,079 in July last year, before the credit crunch first struck.