Mortgage bulletin for week commencing Monday 11 November
The mortgage market continued to grow last month, with more lenders entering the 95% loan-to-value (LTV) market following the introduction of the government's Help To Buy scheme. Ray Boulger, of leading independent mortgage adviser John Charcol, says: "The signs are that Help to Buy 2 will be the catalyst that brings many lenders back into the 95% market. The increased competition will result in rates for high LTV mortgages falling further, although the massive marginal cost for the top 5% slice of a 95% LTV mortgage will probably remain.
"To demonstrate the marginal cost of the last 5% of a 95% LTV mortgage, take the example of the best value two-year fixed rates at 90% and 95% LTV. At 90% the best is 3.54% from Furness Building Society, whereas at 95% it is 4.89% from Hanley Economic Building Society, a difference of 1.35% for products with similar fees. This makes the marginal cost of the top 5% a massive 29.2%."
Available only until 19 November, Virgin Money has launched a range of mortgages through intermediaries for loans up to £250,000. They include a 90% LTV two-year fixed rate of 3.99% with £995 product fee and £300 cashback, for those purchasing a home. At 60% LTV Virgin Money's two-year fixed-rate is 1.89% and five-year fixed rate is 2.95% with a £995 product fee and no cashback. Both 60% deals are available as purchase and re-mortgage loans. Peter Rogerson, commercial director for mortgages and savings at Virgin Money says: "We're expecting these new mortgages to be very popular, and we are delighted to offer them to mortgage customers through our intermediary partners."
For those looking to remortgage, Leeds Building Society has unveiled a range of two- and three-year fixed-rate deals. Available through both direct and intermediary channels, all offer free standard valuations up to £335 and free in-house legal services for standard re-mortgages. All the offers have total fees of £999, with a maximum loan size of £500,000. At 60% LTV, the two-year rate is 2.04%, rising to 2.24% at 75% LTV and 2.49% at 80% LTV. Leeds' three-year fixed-rate mortgages are 2.70% at 60% LTV and 2.99% up to 80% LTV.
Kim Rebecchi, Leeds Building Society Sales and Marketing Director says: "Both the two-year and three-year versions are ideal for re-mortgages, as they offer free standard valuations and free in-house legal services for standard re-mortgages, together with total fees of just £999."
Available direct from HSBC is a range of 85% and 90% LTV mortgages, which it claims are the lowest on the High Street across two-year and five-year fixed rate products and lifetime trackers. For homebuyers with a 10% or 15% deposit, fees are £999 for HSBC current account customers while non-customers are charged a higher fee of £1,499. Available on loans up to £400,000, the new 90% LTV deals include a 3.59% two-year fixed-rate, 4.39% five-year fixed-rate and 3.99% lifetime tracker. The new 85% LTV loans offer a 3.19% two-year fixed-rate, 3.89% five-year fixed-rate and 3.29% lifetime tracker.
Rates on Barclays two-year fixed-rate deals range from 1.89% at 60% LTV to 2.75% at up to 80% LTV, both with a £999 application fee and an early repayment charge (ECR) of 3% of the balance during the fixed period. Barclays' Lifetime Tracker mortgage is currently 3.19% up to 70% LTV, also with a £999 application fee and an ERC of 1% of the balance for the first two years. Barclays buy-to-let mortgage rate to a maximum of 60% LTV, is currently 3.29% and fixed for two years. The deal is available on loans from £500,000 to £1m, with an application fee of £3,999.
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