Mortgage bulletin for week commencing 12 January 

Posted 13 January 2015

The number of first-time buyers continues to grow. According to the Halifax, there were an estimated 326,500 first-time buyers in 2014, 22% up on the previous year. Average deposits fell by 7% to £29,218, while changes to stamp duty now save the average first-time buyer £781 – reducing the tax bill for the average-priced first-time buyer property of £171,870 from £1,718 to £937.

The average proportion of disposable earnings devoted to mortgage payments by a first-time buyer stood at 32% in Q3 2014, down from a peak of 50% in 2007.

Leeds Building Society has introduced new discount mortgages and rate cuts of up to 0.75%. Highlights include a 1.60% two-year discount mortgage up to 65% loan-to-value (LTV) with an £800 fee and a 2.55% two-year discount mortgage up to 90% LTV with an £500 fee. There are two new two-year discount mortgage deals at 95% LTV at 3.55% or 3.99% for the fees-assisted option which offers a free standard valuation up to £560 and fees assisted legal services for standard remortgages. Both products have a fee of £500. A new two-year discount fees assisted mortgage at 1.94% is available up to 65% LTV with no fee and free standard valuation up to £560 and fees assisted legal services for standard remortgages.

Scottish Widows Bank has cut rates on its Professional and Flexible mortgage products. Two-year fixed rates include a rate of 2.19% (flexible) and 1.99% (professional) on loans up to 85% LTV, with a £999 booking fee or 1.99% and 1.79% respectively with a £1,499 booking fee. Three-year fixed rates up to 85% LTV with no booking fee have reduced to 2.69% (Flexible) and 2.49% (Professional), or 2.39% and 2.19% respectively with a £1,499 booking fee.

In addition, interest rates on all Scottish Widows base-rate trackers with a £999 arrangement fee are reducing by 0.2%, with rates on two-year tracker products at 60% LTV starting from 1.19% above Bank of England base rate giving a variable current rate of 1.69% (Professional) and 1.89% (Flexible)

Halifax is offering home movers and first-time buyers two months interest back on their mortgage when they apply for a qualifying mortgage from the home mover and first-time buyer core product range. In addition, a number of mortgage rates have been cut, including a two-year fixed-rate of 1.59% at up to 60% LTV with £1,995 product fee, a five-year fixed-rate on loans up to 90% LTV at 5.29% with £495 product fee, and a two-year fixed-rate shared equity/shared ownership product with no fee at 3.74% at 75% LTV. 

Remortgage customers switching to Lloyds Bank will receive £500 cashback towards any costs they might incur as a result of moving their mortgage, and those applying for a mortgage before 1 March 2015, can also benefit from Lloyds’ dedicated switching service which offers a dedicated mortgage adviser and free valuation and basic legal fees. Lloyds Bank current mortgage rates include a two-year fixed-rate up to 60% LTV of 1.94% with £995 fee, a two-year fixed-rate at 75% LTV of 2.24% with £995 fee and a two-year fixed-rate at up to 85% LTV of 2.89%. Any customer with a Club Lloyds current account can receive a reduction on these rates of 0.2%.

Mortgage Trust, part of specialist buy-to-let lender Paragon, has launched a brand new range of fixed-rate products via intermediaries that includes two-, three- and five-year fixed-rate deals from 65% to 80% LTV.  The new range includes a two-year fixed-rate at 2.99% on loans up to £300,000 with a £495 fee at 65% LTV and a 3.85% three-year fixed-rate with no fee at 75% LTV, a 4.45% two-year fixed-rate with no fee at 80% LTV and a 4.39% five-year fixed-rate with a £495 fee at 75% LTV on loans up to £500,000. Funds are limited on these products, and it is recommended that applicants move fast to secure the rates being offered. 

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