Weekly Mortgage Market Update
Andrew FowlerJune 8th, 2010
Filed under: Buy-to-let, First Time Buyers, Mortgages, Next Time Buyers, Remortgaging
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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