Even the pundits say to 'act fast' to secure a good rate!

There seems to be a lot of talk from various industry pundits regarding the end of the 'good rates' in the mortgage market.  Even Martin Lewis' money saving programme this week suggested that consumers should be quick and secure a competitive rate.

Remember, that fixed rate monies are derived by the money markets, whereas tracker rates follow the Bank of England base rate and lenders decide on their own standard variable rates.

With this in mind, personally, I can't see rates having a significant increase for some time yet.  You might see the odd shift here and there, but with over 11,000 mortgage products now in the market place, this is expected.  To back this up, many lenders fell short of targets last year and with a market that is expected to be similar in overall volume in 2017, compared to 2016,  I can only see competition becoming stronger to fight for the business.

Just in the last few days, we've seen Buckinghamshire Building Society launch a first time buyer mortgage at 95% loan to value (LTV), so just a 5% deposit required.  In addition, the rate is an attractive 3.24% and the product has no product fee and £250 cash back.  This lender also reviews cases manually, rather than a credit score.

Accord Mortgages is giving offset mortgage customers £1,000 when their home loan completes, for a limited time.

Virgin Money has launched new residential and buy-to-let fixed rate loans. The range includes a two year residential fixed rate up to 90% LTV at 2.84% for first time buyers. The loan has no product fee and £1,000 cash back.  Virgin has also introduced a five-year residential fixed rate up to 65% LTV now at 1.89%.  The loan has a £995 fee, £300 cash back for purchases, a free valuation and legal fees for remortgages.

And finally, Bank of Ireland for Intermediaries has increased its maximum loan size to £1.5m for Buy to Lets and increased its upper age limit for Residential customers to 75.

So in short, despite the negative press, no one knows what's going to happen this year and with economists pulling their hair out, you just have to think of number one.  You have no loyalty to stay with your current lender when others will offer better rates.  And only you can decide if you want the certainty of a long term fixed rate, or if you are happy to see what happens with a shorter term tracker rate.  As always, terms and conditions apply and, as Martin Lewis said, speak to a whole of market mortgage broker!

Don't miss the rates, use a Broker

More mortgage product pulls this week resulting in rate increases. Both Nationwide and Accord withdrew products only giving one hours notice to book the funds. In short, this meant that we had an hour to upload a full application on to the lenders systems to book the rate and secure the funds. One minute over the deadline and the rates were lost. Add this to the recent shenanigans over booking funds with the Woolwich (limited funds released at 12am and gone by 12:01am!) and life as a mortgage broker has been far but dull of late, but incredibly long hours!

The Bank of England’s latest mortgage approval figures show mortgage lending fell by 12% in February. Loans secured on property fell from 108,767 in January worth £13.1bn to 95,976 in February worth 11.7bn. Within this figure loans for house purchase fell from 57,899 in January worth £8.7bn to 48,986 in February worth £7.1bn. I suspect March’s figures will return to an
increase as it was incredibly busy throughout the month!

In comparison, gross mortgage lending by building societies and other mutuals rose 28% year on year in February 2012, figures from the Building Societies Association data shows. New mortgage approvals were up 31% on February 2011 and with gross lending at £1.9bn. This sector of the market appears to have a huge appetite to lend and some great product innovation.

Interest only remains in the spotlight with suggestions from Unbiased.com that one in seven UK households are sitting on an interest-only mortgage with no repayment vehicle. The website suggests that 1.6m properties are simply paying off the interest each month and not repaying capital or saving anything towards paying off their mortgage debt in the future. This is a pretty scary and certainly something that requires a review and not left until ‘tomorrow’. Speak to a independer adviser and work out a repayment plan.

Finally, the Leeds Building Society are the latest to reduce interest only mortgages to 50% of the property value and the Co-Operative Bank have increased their Standard Variable Rate
(SVR) from 4.24% to 4.74%. I’m still unsure how this fits within our markets regulatory rules of ‘Treating Customers Fairly’…

..introducing the Retirement Mortgage

More lenders have joined in the latest trend of increasing their Standard Variable Rate (SVR). This is the Lenders own rate of interest, and the rate which a customer normally reverts to once their specific product (i.e fixed rate) period comes to an end. The latest change comes from Yorkshire/Clydesdale who increased their SVR from 4.59% to 4.95%. This was following Bank of Ireland (2.99% to 4.49%), RBS (3.75% to 4%) and Halifax (3.50% to 3.99%) over the last couple of weeks. These can affect some existing customers as well as new customers. The general consensus from the lenders was that the changes were necessary to bring them ‘into line’ with other lender offerings. Do you know what yours is? Maybe this is a good time to review your mortgage and the small print? We do tend to see someone lead the way and others follow quickly behind. The most recent example was the restricting of the percentage (of property value) someone could borrow on an Interest Only basis. Now we’ve seen the increase of SVRs. What’s next…? Life is rarely dull in the mortgage world!

On the positive side - we are seeing some of the smaller lenders looking to launch innovative products. Not necessarily looking for huge volumes, but looking to fill gaps in the market and this should be applauded. One such lender has reviewed the options available to those in retirement and above the age of 65. They’ve realised there’s a huge gap (unless it’s an equity release mortgage required) and have launched a variable rate mortgage product specifically designed to assist this type of consumer. This can be on an interest only basis and up
to any age. Income must be provable, whether this is from pensions, investments, rental income, even earned income or off-spring support and must fit the lenders affordability criteria. A max of 40% of the property value can be advanced and there are only redemption penalties in the first year. This makes it reasonably flexible. One final thing, I’m delighted that the lender has made this totally exclusive to AToM and it is the only product of its type in the current mortgage market! What a plug! To find out more about the AToM Retirement Mortgage, please call us, we’d be delighted to assist.

Lenders are increasing SVRs now too!

Many existing customers with the Halifax will shortly receive a letter confirming that their Standard Variable Rate will increase from 3.50% to 3.99% on 1st May. Not a nice letter to receive, but it is within the lenders power and will affect between a reported 600,000 – 850,000 customers. A spokesman for the lender says the change acknowledges that the cost of funding a mortgage in today's market remains significantly higher than the longer term average. The increase to the rate reflects the fact that raising money through savings and wholesale markets is currently very expensive. It is not expected that many others will follow suit (RBS also had previously increased rates for some 200,000!). Some lenders have written in guarantees to their mortgage offers terms and conditions, so don’t panic just yet as many track Bank Base Rate. It
does mean that you should review your mortgage offer, especially the small print. If your lender can increase the SVR rate whenever they feel necessary, maybe it’s a good time to review your
options. You don’t have to be loyal to the lender…they may not be thinking especially about you!

The deadline for the end of the stamp duty holiday is looming. The first time buyer's £250,000 completion threshold applies up to 24 March 2012 inclusive. During this time, all First Time Buyers can claim relief on Stamp Duty. Not long now, so get pushing for completion!

The latest figures from creditaction report
- The average amount owed per UK adult (including mortgages) was £29,634 in January. This was around 122% of average earnings.

- 318 people are declared insolvent or bankrupt every day (based on Q4 2011 trends). This is equivalent to 1 person every 62 seconds during each working day
- 1,473 Consumer County Court Judgements (CCJ's) are issued every day (based on Q4 2011 trends). The average value of a Consumer CCJ in Q4 2011 was £2,949.
- Citizens Advice Bureaux in England and Wales dealt with 8,652 new debt problems every working day during the year ending September 2011.
- 93 properties are repossessed every day (based on Q4 2011 trends).
- In Q4 2011, Banks & Building Societies wrote-off £1.48 billion (of which £907 million was credit card debt) amounting to a daily write-off of £16.23m!!

Although these are some horrific and eye opening figures, I do think it’s worth stating these
every now and again. It highlights the state of our economy and makes you stop and think about finances and whether there’s something you could be doing better or with another provider. It is always good to talk!