Mortgage pricing at different levels can be a key element in the mortgage advice process, as one decides on the trade-off of more or less deposit and the related mortgage cost.
The curves below have been generated based on a first-time buyer purchasing a £400,000 property.
Choose your LTV and rate preferences
A note on yield curves
These interest rate curves are driven primarily by interest expectations in the market. These expectations are best illustrated by yield curves.
Yield curves show the interest rates, or yields, of government bonds with different maturation dates. Government bonds are heavily traded, highly liquid instruments. They operate as the primary collateral for transactions between banks. They are also the mechanism for monetary policy in the economy and illustrate the "mind of the market" around the issue of interest rate expectations.
Yield curves drive the retail mortgage market pricing through the interest rate swap market. However, that transmission mechanism has a lag. Changes to yield curves can be a lead indicator for changes to mortgage market pricing. When we advise you on your mortgage, we are always comparing yield curves against mortgage pricing to get a feel for pricing opportunities.