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Nationwide slices mortgage rates

[ Posted May 18th, 2012 ]

Although the warning from the Bank of England this week may have seemed to come at a bleak time when many homeowners are already struggling to meet their monthly mortgage payments, in some ways it could not have come at a better time.  This is due to the fact that the Bank of England is warning homeowners to take on fixed mortgages to protect themselves from the damage of the eurozone crisis and increased SVRs, and Nationwide has just released a new set of mortgage deals to the market after slashing their interest rates by a full .1%.

Nationwide has announced some of the best mortgage rates on the market by announcing the slash that now offers borrowers three new types of fixed mortgage deals that have all had their interest rate slashed by the .1%.  Each of these loans comes with a LTV that can be valued as high as 70% for those who may not have a large deposit or a large amount of equity in their home.  Plus, for new homeowners that are taking part in the governmental NewBuy Scheme it is even possible to get a LTV as high as 95% set for five years at only 5.99% which is a pretty good deal for a long term mortgage product.

The application fees attached with the new fixed mortgages are also all fairly reasonable which may be contributed to the fact that Nationwide is supporting the NewBuy Scheme launched by the government heavily in an intent to help first time home buyers get in on the market.  The bank has reduced their products fees by almost half since the start of the month allowing for some great deals all around on mortgage products for those who act now.

First time buyers can receive a mortgage after paying an application fee of only £200 while those who are remortgaging their homes or are moving can look at an application fee that is still set low at £450.  All of the home loans also come with an attached £99 booking fee but there is no completion fee making the rates competitively low when you factor in associated fees that other banks may offer.  Tracie Pearce of the banking institute stating that while other lenders are increasing rates, Nationwide is proud to remain competitive by reducing theirs and offering good news to customers instead.

How to escape increasing mortgage rates

[ Posted May 12th, 2012 ]

Many homeowners took the increase in mortgage rates by the major banks last week in their stride or at least in a low key fashion since they considered themselves helpless in the situation.  While it is true that those on an SVR with one of the major banks such as Halifax and the RSB had the right to increase mortgage rates with or without customer approval, there are choices that you can make as a mortgage holder to get out from underneath the rate hikes.

If you have sufficient credit there is actually no reason that you should pay more simply because the bank demands you too. Those do not have a mortgage with one of the banks that just increase their rates should not get too smug, because unless you have one of the many fixed mortgages products, you may be next.

In fact, anyone with a SVR may be next as many other banks and building societies plan to follow suit next including big lending agents Co-op and Yorkshire Bank.  In fact, experts predict that by the end of the year most people on SVRs will see their rates increase back up.

While an increase of .5% likely is not going to seem like much at first glance, it certainly is not going to result in one of the best mortgage rates, and it is going to do more damage to a household budget then it will seem too at first.

This is due to the fact that the average homeowner is going to see about £40-£50 added to their mortgage payment each month, and by the end of the year that will add up to additional costs of about £480- £600.  At this point it is easier to see how the slight increase can really start to stretch a budget.

The good news is that homeowners that have at least 15% equity in their home do have another choice: to shop around for another mortgage product.  While you will to be careful about termination fees and new product fees, if you are diligent in your efforts to find a new deal it is possible to get locked into a lower rate fixed product.

Bear in mind that even if the fixed product is a bit higher than you are paying now, it will protect you against future SVR hikes and if the mortgage market remains unstable it is likely that these are coming in the future.

Halifax announces increase to mortgage rate

[ Posted March 9th, 2012 ]

Halifax was the second of the major banking institutes over the past two weeks to announce that they will increase their mortgage rates for those that have a standard variable rate mortgage.  The new change will affect about 850,000 borrowers who will see their mortgage costs jump once the change takes place on 1st May.

The bank claims that they have had to increase their rates due to the higher costs of mortgage funding given the current economic environment. However, many mortgage owners are wary of the change affecting their monthly budgets and feel betrayed as the base rate is still quite low.

Customers will be hit hard by the increase in the mortgage rate as the average consumer will find themselves paying £17 to £500 more per month on a mortgage that has 15 years left on it.  On average, a homeowner with a £150,000 mortgage will find themselves paying £40 more per month; which adds up to an extra £480 per year. Homes where the budget is already tight on a month to month basis are the most likely to be affected, as spare money becomes even less of a common occurrence.

Those who may not be able to afford the rate increase will want to take a look into the remaining fixed mortgages options that are left on the market. While some of the fixed offerings may not be a much better choice than the SVRs, in the long term they may be the safer option given the fact that they will at least protect homeowners from future SVR increases.

There is no way to tell if this will be the only rate increase this year from Halifax and the other major banks, so action now may be the best way to protect one’s future interests. The Consumer Action Group is calling the increase in interest rates by Halifax shocking, as well as the other announced increase in SVRs by the RSB and Santander.

However, Halifax is at least responding to its customer’s concerns by offering fee-free transfers to its borrowers that want to change their deals. They are also offering customers that have a 60% LTV or higher the chance to switch to a fixed two year mortgage set at 3.49% with no fees attached. For some customers this may be the best option versus taking a chance on future SVR increases.

Lending rates skyrocketing

[ Posted March 8th, 2012 ]

Despite the fact that the Bank of England base rate is still sitting at the historical low of 0.5%, banks are still hitting household budgets hard by tightening and increasing mortgage rates, interest rates on credit cards, and increasing their interest on overdrafts.

In fact, new figures released from the Bank of England show that the gap between the base rate and the average mortgage is now wider than it has been since January1995, which is when records documenting the gap were first recorded. Also at its highest peak yet is the lending rate assigned to overdrafts, which currently sits at 19.5%.

While the news focuses most on the rising costs of home ownership and jumps in the average fixed mortgages and SVRs deals, those who hold credit cards are also feeling the pinch in their pocket every month. The average credit card interest rate is now 17.3%; the highest that it has been in the last decade. Many experts are now turning an eye to the banking system, stating that the banks are taking advantage of the situation to profit when lenders should still be benefiting due to the low base rate.

Former chairman of the Treasury Select Committee, Lord McFall, stated that due to this fact many people are losing their faith in the banking sector. Given the fact that the public had to bail to out the banks with their hard earned taxes, it seems unfair that the banks are now charging more for services than they should be.

The latest increase in SVRs from many high street banks that announced their mortgage rate increase over the last few weeks is where most homeowners are feeling the strain, making the public feel as if they have not been given a fair deal.

Figures from the Bank of England reveal that the average interest rate assigned to a SVR mortgage was 4.16% during January, which is a 3.66% difference from the base rate. This gap is the largest it has been in almost two decades, and mortgage levels are expected to get even worse over the next few weeks.

In fact, a rate increase from Halifax this week has already affected 850,000 homeowners and with other banks expected to follow suit the amount of people affected will only increase.  Although Halifax only increased their SVR by 0.49%, for those with a £150,000 mortgage, this means an extra £40 each month must be found to meet the payments

Number of mortgage complaints fell in 2011

[ Posted March 2nd, 2012 ]

The number of mortgage complaints recorded by the Financial Ombudsman Service in 2011 decreased by five percent. Despite the fact that the year on year average continued to fall in a downward trend, in the last half of 2011 there were about 38% more complaints than there were during the first six months of the year.

Surprisingly, it is not the increase in mortgage rates that had most people concerned, but instead administrative errors that caused consumers to see their mortgage applications denied unfairly. Most mortgage complaints centered on consumers that were not able to port their mortgage as a result of tighter lending criteria that now make the consumer inapplicable.

Although mortgage contracts generally have conditions placed on them that prevent a consumer from being able to port their mortgage as well, the FOS is able to look at the criteria that is listed and decide if a customer is being fairly denied by a bank. Other complaints that were received in high volume during 2011 include disputes where a lender increased the age limit for a mortgage or increased the cap on the SVR mortgage rates.

Interestingly enough however, overall complaints that centered on the mortgage rates were actually less common during 2011. This is most likely a result of the low base rate that has remained set at 0.5% by the Bank of England and the fact that those whose fixed mortgages ended were met with very low SVRs.

In terms of arrears, about the same amount of complaints were issued as in 2010, but there are more complaints continuing to be heard regarding charges that are being applied to arrears by lenders and the inflexibility of lenders in this situation.

The Financial Ombudsman still hear some repossession cases although they were low in number and mostly concerned complaints about ineffectual communication with the lender. Overall, the Financial Ombudsman Services received a total of about 106,000 complaints in 2011 and out of these 89% were about financial businesses.

Most cases received by the FOS were about payment protection insurance and the FOS expects that they will receive an even higher record amount about PPI this year as well. This is due to the backlog of PPI cases that are currently being addressed by the banks.

Yorkshire Building Society offers its offset mortgages for ten years

[ Posted March 1st, 2012 ]

One out of every three mortgage applications approved by Yorkshire Building Society are for offset mortgages, and the building society announced that they are proud to now be able to offer these products for their tenth year.

The advantage of offset mortgages is that they bring with them lower mortgage rates, allowing consumers to save a larger amount of money over time. As a limited amount of lenders offer this option, many home mortgage seekers are not even aware that they have this option open to them.

Jenna Smith, mortgage product manager for Yorkshire Building Society, stated that as one of the first building societies to be able to offer offset mortgages as a choice for consumers, they believe that the offset option offers a great opportunity to savvy customers.

Smith continued to explain that based on their own figures it is easy to see how an offset mortgage can actually make a difference in homeowners’ finances when you figure how much they save over time in interest. The drop in mortgage rates also has helped homeowners to save money, along with the unique mortgage product offering.

In 2011, the average home mortgage account was estimated at about £184,000, out of which an offset mortgage borrower held about £51,000 in their offset savings. Therefore, about 28% of their mortgage was offset. Based on this term, over a 25 year mortgage term a monthly payment would cost the much lower figure of £971 and a mortgage could be paid off in just five years.

This saves the average home owner about £63,000 in interest that would have built up if the mortgage rates stayed aligned with what they are now over the course of the next five years. Many people believe that an offset mortgage is only a good option for those that have a large savings, but according to Yorkshire even those who are only able to place £2500 aside in an offset savings account could reduce a mortgage valued at £1000 by about half a year saving about £4,000 in total interest.

In addition, placing £25 a month in an offset savings account every month for term could help shorten a mortgage term by about nine month,s resulting in an overall savings of £5,000 when you add up interest that does not have to be paid.

The best mortgage rates on the market

[ Posted February 24th, 2012 ]

For those who have not yet remortgaged in an effort to take advantage of low mortgage rates, the good news is that there are still some great deals out there on the market. In fact, with interest rates remaining low and the Bank of England base rate staying at its current low, the market is still able to offer some of the best mortgage rates of the last few years.

Given the fact that the base rate is expected to stay depressed for at least another 18 months, with some experts predicting it will stay down until 2017, a fixed mortgage may not even be the best bet. Instead, lenders are starting to push their tracker and variable mortgage rates and some experts are starting to agree that for the best deals this may be the way for homeowners to go.

Over the last two months there has been a significant amount of new deals available for first time home buyers and many of these are also great deals for those who need to remortgage to take advantage of.  This is partially due to the fact that the stamp duty holiday on new home purchases will end near the end of March.

Those that can now swing a 90% LTV may want to take advantage of the new two year fixed mortgages that are being offered by HSBC, set at the low price of 3.84%. What makes this deal particularly enticing to home owners is the fact that there are no fees associated with the deal so if approved all that is owed is the deposit or equity in the home. Also attractive is a First Direct product that is set at 4.19% for two years, although this deal does come with a £999 fee.

Of course, those who have a home and equity may instead want to look into a mortgage deal that offers better rates for a higher LTV, such as the Mommouthshire Building Society deal that requires an 80% LTV but offers 3.35% for three years without any associated fees.

A better option for those willing to take a chance with the variable mortgage market comes from the Marsden Building Society, which is also based on an 80% LTV but starts at 3.19%. There is a £598 fee for the loan offer but valuation is free and remortgaging homeowners receive a £250 rebate.

TMBC offers discounts for commercial mortgage products

[ Posted February 13th, 2012 ]

TMBC, the commercial mortgage and buy to let lending specialists, have launched a new deal in conjunction with Hinckley & Rugby Building Society that will see their mortgage rates drop by as much as 0.5% for those who take up their new two year offers.

The new rate will be set at 3.25% for mortgages that come with a free valuation for those who can manage a 60% LTV or better.  In addition, there are no charges for early repayment for those who rush to take advantage of the market.

The low commercial mortgage rates do have an attached £999 completion fee and £250 arrangement fee which is common place with high buy to let or commercial investments.  Therefore, those that want to take advantage of the low property prices on the market right now will want to take a look at the TMBC deal which the chief executive of the company, Andy Young, states is designed to help make it an attractive product for those that want to remortgage or purchase new rental properties.

He added that the free valuation will help reduce the standard upfront costs that come with securing a new mortgage or remortgage. It is expected that it will be most popular among those looking for low buy to let mortgage rates as the housing market is quickly becoming a rental market.

Intermediary development consultant Gill Vernau for Hinckley & Rugby stated that last year was an excellent year for the buy to let market and with more improvements and great deals such as the one they are offering with TMBC, 2012 looks like it will also be a great year. He added that the company is looking to offer more buy to let products to interested investors.

Vernau also stated that the aim of Hinckley & Rugby right now is to increase the amount of loans they have available at the low 60% LTV rate to help encourage landlords to take a second look at increasing their portfolios.

He added that the building society expects to see a rise in the amount of new applicants that take a second look at the product offer simply because of the low LTV and the fact that it will allow those who already have properties to reduce their mortgage rate and potentially afford more properties in the future.

Private banks offer best mortgage rates

[ Posted February 10th, 2012 ]

Despite the fact that over the last few weeks many lenders are increasing their mortgage deal costs because of the rising costs of lending, many private banks are still offering some of the best mortgage rates available out there on the market.

Last week saw major lenders such as UBS, RBS Private, and Barclays Wealth increase their average mortgage rates due to the fact that the wholesale markets have increased their funding costs. This has been disappointing to those who had hoped to secure a low mortgage before the housing market turned around.

USB increased its pricing by about 1.5 points above the interbank lending rate and then another 1.6 points for loans that have a 65% LTV or less. For those with higher LTV’s, the bank increased their rate by another 1.85%. Barclays Wealth followed suit, choosing to increase its tracker deals by about 0.3% and its fixed mortgages by another 0.1%.

RBS Private chose to do the same by increasing their tracker rates by about 0.2% and adding on additional fees of around £1,500, which is high enough to keep many potential home owners away from the market. Despite the fact that some of the banks are sharply increasing their offers, private banks continue to offer the best mortgage rates out there for homeowners that want to borrow large sums of money.

In fact, for those who happen to be searching for a loan on a home that is valued at over £1m, private banks are the best options according to many analysts. Mortgage broker Nigel Bedford stated that many high street lenders that offer large amounts will not offer competitive rates, with banks such as Lloyds Banking Group choosing not to offer interest only loans for those seeking amounts higher than £1m.

However, private banks such as Clydesdale Bank will offer a two year discount rate as low as 2.68% for the same type of million pound loan. Nationwide will also toss in a two year tracker set at 3.39% that is pretty evenly matched with the Halifax 3.84% deal for the same multimillion deal.

The truth is that most private banks will offer rates that are set closer to the Libor due to the fact that they are willing to play with their mortgage figures a bit more, making them a great choice for high mortgage loans.

5% LTV’s are back on the market

[ Posted January 28th, 2012 ]

After the last few years have been spent with most first time home buyers spending their time saving instead of purchasing because of high LTV’s on most home mortgages many home buyers are starting to feel relief as some lenders are offering 5% LTVs.

Five years ago there were hundreds of different 5% LTVs for homeowners, allowing first time home buyers to easily jump onto the market, but as mortgage rates continued to fluctuate and the credit crunch hurt lenders everywhere these deals slowly dropped off the radar, until now.

The fact that such low LTVs are on the market at all in 2012 is quite a surprise as most brokers called for sharp increases in mortgage rates and tighter credit restrictions due to the unstable economy and the looming eurozone crisis.

However, those seeking to buy may just have some ground to stand on if they can get out there and take advantage of the surprise that the first few weeks of 2012 have offered them, because if there is one thing for certain, it is that low rates and low LTVs are not going to last much longer.

Leeds Building Society was one of the first lenders to offer a mortgage with a 5% deposit attached to it. Of course, it also comes with an interest rate of 5.25% which is pretty high considering the average best mortgage rates that are out there right now.

It also has £999 attached to it in fees, but for those that will never likely be able to scrape together an LTV that is 75% or more this is a fantastic way to get a step onto the property ladder and get some equity built up to make future home purchases a bit less stressful.

Ipswich and Newcastle building societies also have 95% LTV deals on the market that were introduced last week and John Charcol the broker stated that they will also offer a low deposit home purchase scheme at the beginning of February aimed at helping first time home buyers out.

On the other hand, buyers that can manage a 90% LTV should take a look over at HSBC and their low 3.84% which can be a significant amount of savings for those that can afford a bit more upfront on their new home purchase.

 
 
 
 
mortgagerates123.co.uk aims to provide every client with cheap, affordable and best mortgage loans in the UK market, however the actual mortgage rate available will depend on client's financial circumstances and credit history. Although, mortgagerates123.co.uk has made every effort to ensure that the mortgage rates listed are correct, it bears no responsibility in case of an error. 
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