Rates Double for 90% LTV mortgages

The interest rate for a 90% LTV 2 year fixed rate mortgage is now two and a half times higher than a 60% LTV product of the same type, Mortgage Brain's quarterly product data analysis has revealed.

The analysis, a breakdown of all main product types in the UK mortgage market for a repayment mortgage, is calculated by the lowest rate for a property worth £180,000.

Latest figures - as of 1st October, 2013 - show that the lowest rate for a 90% 2 year fixed mortgage (at 3.54%) is now 2.39 times higher than the lowest rate product with a 60% LTV (1.48%).

The difference between the lowest rate 60% and 90% LTV tracker is almost as great - 2.1 times (or 112%) higher, with the lowest rates currently standing at 1.69% (60% LTV) and 3.59% for a 90% LTV product.

The gap between the 2 LTV bands has also widened since the start of the year - up 21% - when the 90% LTV 2 year fixed was listed as being 1.98 times more than the lowest rate 60% LTV product.

Converted to actual cost over a 2 year period for a repayment mortgage, the lowest rate 2 year fixed mortgage with a 90% LTV is now calculated to cost borrowers 25% more than the lowest rate 60% product (up from 12% more in January, 2013).

Similarly, borrowers looking for a 90% 2 year tracker will face an 18% increase in the cost for the repayment compared to the lowest rate 60% LTV product