Mortgage bulletin for week commencing 29 September 

Posted 30 September 2014

The government continues to push schemes aimed at encouraging more new homes to be built and to help more people onto the housing ladder, particularly first-time buyers.

With over 59,000 new homeowners benefitting from Help to Buy schemes across the UK the government is now launching a £400m Rent to Buy scheme, available to housing associations and other providers, to build new homes. The scheme allows those renting the properties to buy them after a fixed period of below-market rent.

Nationwide Building Society has resumed its Help to Buy equity loan scheme for home movers and house purchasers in England up to a value of £600,000. Buyers must have a 5% deposit, based on the purchase price, and customers applying via the scheme now have unrestricted access to Nationwide’s full core range.

In addition, mortgages will be either fee-free, or come with a £999 product fee, discounted to £499 for first-time buyers. Products include a first-time buyer 95% loan-to-value (LTV) Save-to-Buy two-year fixed-rate mortgage at 4.99% with fees of £499, or 5.39% with no fee. The same deal, fixed for three years, is 5.39% with a £499 fee or 5.69% with no fee, and the five-year fixed-rate Save-to-Buy mortgage at 95% LTV is 6.09% with a £499 fee or 6.29% with no fee.

HSBC is offering Help to Buy mortgages at 95% LTV for pre-owned home purchases on loans up to £400,000 over a maximum of 25 years. The two-year fixed-rate is 4.79% while the five-year fixed-rate is 5.29%. Both product carry a non-refundable booking fee of £99, and early repayment charges (ERCs) apply during the fixed-rate period.

The Post Office is offering a two-year fixed-rate Help to Buy mortgage at 95% LTV for 4.95% with a five-year fixed-rate option at 5.35%, both with no arrangement fee.

Virgin Money is offering £300 cashback on a range of Help to Buy mortgages at 95% LTV. Its two-year fixed rate is 5.39%, while a three-year fixed rate is 5.69%. The five-year fixed-rate alternative is 5.79%. All are available direct or through intermediaries.

Meanwhile, the West Brom Building Society is cutting the cost of borrowing over five years for mortgage customers with a 25% deposit. The Society has reduced its five-year fixed-rate at 75%LTV by 0.21% to a competitive 3.18%. There is a £199 booking fee and a £400 completion fee.  The mortgage is available directly from the West Brom and via selected intermediary partners for customers who are purchasing or moving home and to existing borrowers who want to remortgage. The West Brom also has a new two-year fixed-rate deal at 1.79% (up to 65% LTV), with a £199 booking fee and an £800 completion fee.

The Mortgage Works has reduced rates by up to 0.60% on its Buy-to-Let and Let-to-Buy products, New two-, three- and five-year fixed-rate and two-year tracker products have been added to the lender's 60% LTV range. Existing two-year fixed-rates have also been reduced by up to 0.6% and selected products up to 75% LTV have been reduced by up to 0.5%. Rates for loans up to 60% LTV include a two-year fixed-rate product at 2.84%, a three-year fixed-rate product at 3.39% and a five-year fixed-rate at 3.89%. All products have a £995 fee and are available to both Buy-to-Let and Let-to-Buy customers.

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