90% LTV two-year rates at lowest since 2008

The average interest rate for a 90% LTV two-year fixed rate deal has dropped to its lowest level since January 2008, at 5.39%, according to Moneyfacts.

Its figures showed current rates are down from 6.05% six months ago and 5.97% one year ago, as lenders have begun to bring out more competitive deals.

In addition, average five-year fixed rate at 90% LTV has dropped to 5.87%, 1% less than six months ago and down from 6.66% a year ago.

Louise Holmes, spokesperson for Moneyfacts.co.uk, commented: "Substantial rate reductions in the higher LTV market will be encouraging news for borrowers.

"The availability of higher LTV mortgage products has increased over the past couple of years. Lenders have begun to launch more competitive products to borrowers who, during the height of the credit crisis, had pretty much given up on the prospect of owning their own property."

She added: "Interest rates are predicted to stay at the historical low of 0.50% for the foreseeable future.

"Borrowers would be wise, however, to take advantage of low fixed mortgage rates while they can as lenders will increase product rates once interest rates begin to rise."