Mortgage bulletin for week commencing Monday 16 June
In a week when the government has announced plans to encourage local authorities to increase the availability of land for housing, particularly brownfield sites, and the governor of the Bank of England has signalled a possible rise in the Bank of England base rate (BBR), mortgage lenders appear to be holding a wait-and-see approach, with no further reductions in mortgage rates being published by major lenders this week.
The uncertainty is pushing many potential homeowners to look for more longer-term fixed-rate deals to plan their mortgage outgoings over time. While the lender's current standard rate is less of a guide to future rates than, say, a two-year fixed-rate deal, early repayment charges (ERCs) are a consideration if homebuyers want to change providers during the fixed-term period, with some lenders charging as much as 7% of the outstanding balance to redeem a mortgage early.
Woolwich mortgages from Barclays Bank include a ten-year fixed-rate product at 3.89% on loans up to 70% LTV with an application fee of £1,499. ERCs are 6% of the balance if repaid before June 2021, then 3% of the balance thereafter.
Norwich and Peterborough Building Society is offering a ten-year fixed rate of 4.19% on loans up to 75% LTV, with no product fee and free valuation. The product is available to new borrowers in England and Wales and ERCs apply if the loan is repaid in full or of borrowers overpay more than 10% of the loan amount or £10,000 - whichever is lower - during the fixed-rate period.
Yorkshire Building Society Flexi ten-year fixed rate at 4.34% on loans up to 75% LTV. Loans are available to first-time buyers, those moving home and those remortgaging from another lender up to £5m. There is no product fee and while borrowers can repay up to 10% of the remaining loan every year without penalty, ERCs are 7% for the first three years, reducing 1% per year thereafter to 1% in the final year.
Newcastle Permanent Building Society has 10-year fixed-rate at 4.49%, for loans up to £500,000 to a maximum of 80% LTV. The product offers loans from £10,000 to £1m and charges ERCs of 5% for the first five years only - there are no ERCs for the remaining five years of the fixed term. A reservation fee of £199 is payable and completion fee of £399 on loans up to £500,000 or 0.3% on larger loans.
The Co-operative Bank (Britannia) has a 10-year fixed-rate product at 5.49% with and arrangement fee of £999 or 5.99% with no arrangement fee. Both products are available over the phone or in branch and only on loans up to 75% LTV. Borrowers can overpay by up to 10% of the previous year end balance of their mortgage each year without penalty and there is no tie in after the ten-year fixed-rate period ends. ERCs of 6% are payable for the first six years of the loan, reducing by 1% annually thereafter.
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