Mortgage bulletin for week commencing Monday 18 November

Posted 18 November 2013

While many mortgage products attract product or arrangement fees in return for a lower interest rate, lenders have a range of deals with no fees to assist first-time buyers, though interest rates will be generally slightly higher.

First-time buyer deals with no fee include a four-year fixed-rate mortgage from TSB at 3.34% at 95% loan-to-value (LTV), restricted to existing TSB customers. Nationwide is offering a two-year fixed-rate deal, also at 95% LTV with an initial rate of 4.46% for mortgages up to £350,000, while NatWest and Royal Bank of Scotland will lend first-time buyers up to £570,000 at 4.99% fixed for three years. Paying back any of these mortgages within the fixed rate period will incur early repayment charges (ERCs) of up to 3% of the value of the outstanding loan.

For those with larger deposits, HSBC is offering a three-year fixed-rate mortgage to first-time buyers on 70% LTV loans up to £1m at 2.49%. No fee is payable, and ERCs are 1% of the balance repaid for the fixed term. Santander has a 70% LTV two-year fixed-rate deal at 2.59%, with no fees and 3% ERCs on loans up to £550,000, while a similar deal from NatWest is available at 2.69%, although the interest rate after the fixed period, currently 4%, is cheaper than Santander's current reverting rate of 4.74%.

For homeowners looking to remortgage for the first time, TSB is offering £500 cashback to its current account holders or customers choosing to open a current account alongside their new TSB mortgage, as long as at least £1,000 per month is credited to their TSB current account. TSB's two-year fixed-rate deals at 60% LTV include 1.79% on loans between £150,000 and £1m with a product fee of £1,995 or 2.09% on loans from £5,000 to £1m with a £995 product fee, and a 2.49% two-year fixed rate for loans between £5,000 and £149,999 with no fees and free valuation and standard legal fees. ERCs are payable on all three products during the fixed-rate period, and loans must start by 28 February 2014. A similar mortgage is available from TBS up to 85% LTV at 3.94% on loans from £5,000 to £1 million with no product fee.

A number of other lenders are offering two-year fixed-rate mortgages for those looking to remortgage. The ‘2 Year Fixed Special' from HSBC offers a two-year rate of 1.49% on loans up to £500,000 at 60% LTV with a £1,999 booking fee. Borrowers can pay up to 20% above their normal monthly payment without penalty.

The Post Office is offering a two-year fixed-rate of 1.63% for customers looking to remortgage at up to 60% LTV with a fee of £1,995, or 2.49% with no fees on loans up to £1m. For those with only a 10% deposit, the Post Office is offering 90% LTV fixed-rate loans at 3.99% fixed for two years with an arrangement fee of £1,495, 4.45% for a four-year fixed rate with a fee of £995 or 4.99% five-year fixed rate with no arrangement fee.

Yorkshire Building Society is offering a two-year fixed rate deal for remortgagers for loans of 65% LTV at 1.99% with a product fee of £845, or 2.19% with a reduced fee of £345, while similar deals for loans up to 75% LTV are currently 2.04% with a fee of £845 or 2.44% with a fee of £345.

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