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The number of borrowers on lenders’ Standard Variable Rates is now 2.3 million, representing 28% of the total mortgage market, according to Yorkshire Building Society. Again this week the minuets for the Bank of England last meeting came out with 1 member recommending an increase in rates. An increase in the Bank of England Base Rate will come, whether this is late this year or early next year, but it will come. Therefore, it would be a good time to now to consider moving onto a fixed rate deal as these deals are currently offering excellent value. The advantage of the fixed rate will be that you will avoid the hit as rates start to rise over the next 12-18 months. There are now a large number of competitive deals available for 2-year fixed rates at under 3.50% and 5-year fixed rate deals can be secured at around 4.35% and above.
Who should consider remortgaging, well currently anyone who is on a Standard Variable rate of 3.50% or higher, anyone with 15% or more equity in their property, someone with no adverse credit and anyone who has the ability to evidence their income. However, if you are with the Halifax you are also able to consider a product transfer this all depends on product wants and loan to value. If you would like to discuss the options open to you for a remortgage please do not hesitate to contact us.
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- Fantastic news this week in that the Skipton Building Society have come back to the mortgage market with a new range of products. They are offering a range of 2 and 3 year fixed and tracker deals with competitive fees for both purchase and remortgage. They are also offering a couple of exclusive products at 90% loan to value which will bring some much needed competition to this end of the market.
- The FSA has announced today in a consultation paper that they are going to stop lenders from offering ‘Self-Certification’ and ‘Fast Track’ mortgages to both employed and self-employed mortgage applicants. What does this mean, that going forward everyone will have to provide evidence of income from employer, bank, accountant or HMRC. As usual this is the FSA with their finger on the pulse of the mortgage industry. As any Mortgage Broker will tell you ‘Self Certification’ mortgages have not been available for the last 12 months, a classic example of the mortgage market regulating itself in spite of the regulator.
- With the end of ‘Self Certification’ mortgages the question is now open to Accountants what stance will you take for clients? Help them pay as little tax as possible so lowering their Net Profit or pay more tax have a higher Net Profit and be able to afford that next house purchase or remortgage?
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The Cambridge Evening News has today confirmed what we have being seeing first hand over the last 12 months, that house prices in Cambridge have jumped up well above the National trends. We believe that this increase is having an effect not only on Central Cambridge but also on all surrounding villages and Towns.
As a result of these increases in house prices, it is now more important than ever to get fully independent advice with regards to your mortgage and to get an early understanding as to your full borrowing potential. Please do not hesitate to contact us if you have any questions as to how differing lenders assess individuals and decide how much mortgage they can raise.
The full article from the Cambridge Evening News website can be found at http://www.cambridge-news.co.uk/Home/City-house-prices-soar-60000-in-just-a-year.htm
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Alliance & Leicester is lowering its Standard Variable Rate (SVR) from 4.99% to 4.24% for new customers, bringing it in line with Santander’s SVR. All new A&L mortgage products will now revert after their initial rate to a Bank of England base rate tracker at +3.74%, currently 4.24%. The move follows court approval for the legal transfer of Alliance & Leicester to Santander UK on 28 May.
A new Homeowner Variable Rate is being introduced for new Lloyds TSB and Cheltenham & Gloucester mortgages from 1 June 2010. No existing mortgages are affected by the introduction of this rate, they will remain on the existing Standard Variable Mortgage Rate which is currently 2.50% (Bank of England tracker at +2.00%). The Homeowner Variable Rate of 3.99% will apply to new Lloyds TSB and Cheltenham & Gloucester mortgages from 1 June. This is not a tracker and can be altered at anytime. This makes staying on the C&G’s base rate less attractive for clients in the longer term, so look out for remortgage opportunities.
Northern Rock will no longer accept certain repayment vehicles on its interest-only mortgages. It will not accept inheritance, bonuses, dividends, regular overpayment and an intention to convert to repayment at a future date as acceptable repayment vehicles. In March the lender reduced its maximum Loan To Value from 85% to 75% for interest-only. In addition, the acceptance of sale of property as a repayment vehicle will be limited to cases with a maximum LTV of 60% and £150,000 minimum equity. The bottom line is that Northern Rock want to do repayment mortgages!
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Cheltenham & Gloucester has launched a two-year tracker at 0.01% below the Bank of England base rate, available at 85% and 90% LTV which results in an incredible initial rate of just 0.49%. However, this rate only lasts until December 31 2010, at which point it jumps to base rate plus 5.49% until July 31 2012 (an increased rate of 5.99% currently). This kind of product may be of assistance to help First Time Buyers in getting onto the property ladder but they do need to budget for the uplift.
From tomorrow, Nationwide will reduce selected rates on its five-year fixed rate mortgages. The reductions range between 0.10% and 0.31%, with the average cut being 0.23%. For those remortgaging rates are reducing across all tiers up to 75% LTV. Five-year fixed rate are being reduced by 0.26% available from 4.88% (up to 70% LTV), new customers can borrow up to 85% LTV.
Two lenders have come to market for buy-to-let offerings, Aldermore and Precise mortgages, who are offering mortgages only via the broker market. So another good reason to talk to us if you are considering re-financing your investment portfolio.
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