Product data analysis from mortgage technology solutions provider Mortgage Brain is being used to show the true cost of mortgages and reveals that potential borrowers face significant rate and cost differences between LTV ratios.

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 of £180,000 and has shown that the lowest interest rate for a 90% two year Tracker is more than twice that of the lowest rate product with a 60% LTV – 105% higher.

The difference in the lowest rate available between a two year fixed with a 90% LTV and a 60% LTV product is almost as great – 82% – with the lowest rates being 1.64% (60% LTV) and 2.99% (90% LTV) respectively.

In terms of actual cost over a two year period, the lowest two year Fixed rate mortgage with a 90% LTV will cost borrowers 20% more than the lowest rate 60% product of the same type.

Similarly, borrowers face a 14% difference in cost for the repayment of the lowest rate two year Tracker with a 90% LTV compared to the lowest rate 60% LTV product.

Post courtesy of Financial Reporter.