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08 July 2014

UK, July 8, 2014: Figures released today from Mortgage Brain’s quarterly product data
analysis show that mortgage rates are starting to rise.

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
July 2014 – show that the interest rate for a 60% LTV five year
Fixed mortgage has increased by 18% over the past three months – up from 2.35% to
2.78%.

The lowest rate five year Tracker with a 60% LTV, having held level for three months at
2.99%, increased by 13% during June and now stands at 3.39%. Consecutive increases
during the past two months have also seen the lowest rate three year Fixed with a 60%
LTV increase by 12% since April 2014 – up from 2.14% to 2.99%.

Mortgages with a two year term, by comparison, performed better during the second
quarter of 2014. The lowest rate two year Fixed (60% LTV) saw a 7% increase since April
2014 – up from 1.48% to 1.58% - while the interest rate for the same product with a 90% LTV
dropped by 13% over the same period (down from 3.45% to 2.99%).

The lowest rate two year Trackers (60% and 90% LTV) remained level over the past three
months with the 60% LTV product holding a rate of 1.49% since April 2014 and its 90%
counterpart returning to a rate of 2.49%.

Interest rates for products in the buy-to-let market performed the best over the past
three months, however. Out of the 18 buy-to-let products analysed only two – the lowest
rate two and three year Trackers with a 60% LTV – saw a rate rise when compared to April
2014 (60% 2yr Tracker up 5%, 60% 3yr Tracker up 7%).

Fixed rate products over the same terms, however, saw significant rate reductions over
the past quarter with the lowest rate two year Fixed mortgage (60% LTV) dropping 12%
from 2.49% in April to 2.19%. The lowest rate three year Fixed with a 60% LTV also dropped
by 11% since April and an 8% rate drop was seen for the lowest rate two year Tracker with
a 70% loan to value.

Mark Lofthouse, CEO of Mortgage Brain, comments, “While borrowers have benefitted
from significant rate drops over the last 12 months, there are early signs that the market
could be on the turn, especially within the three and five year term purchase schemes.

“For some time now the BoE has been hinting at a rate rise in 2015, and while it’s perhaps
a little early to really see what effect the Mortgage Market Review is having on mortgage
rates, we are starting to see ripples across the market. The next few months could prove
quite interesting as things become clearer.”

Despite the fluctuation in interest rates, the rate difference between LTV bands continues
with the lowest 90% two year Fixed (at 2.99%) almost 90% higher than the lowest rate
product with a 60% LTV (1.58%).

Similarly, the difference between the lowest rate 60% and 90% LTV two year Tracker is
almost as great – 67% higher – with the lowest rates currently standing at 1.49% (60% LTV)
and 2.49% for a 90% LTV product.

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