Mortgage bulletin for week commencing Monday 28th April
According to a survey by Ocean Finance, nearly 85% of first-time buyer mortgage applications were accepted in the last 12 months, however new rules on lending may make it more difficult to obtain a mortgage in the future.
In advice released by the Building Societies Association (BSA) this week, the organisation's head of mortgage policy Paul Broadhead, says, "We do not believe that the majority of borrowers will have an issue, despite the horror stories that may appear in the coming weeks. It is highly unlikely that a single purchase or category of expenditure will make the difference between yes or no decisions, but if anyone is concerned, we would urge them to talk to their local building society for information, advice and support".
Variable rate mortgages, based on the Bank of England Base Rate, currently 0.5%, can provide good deals for lenders looking for longer-term certainty.
HSBC is offering a variable rate mortgage at Base+1.49%, for the term of the mortgage. This equates, currently, to 1.99%. The product offers free basic legal work, has a fee of £999 and is available on loans of up to 60% loan-to-value (LTV). A similar product for loans up to 70% LTV is currently 2.19%, or Base +1.69% for the term of the mortgage with fees of £999. A fee-free option is offered at Base+1.99% including both basic legal and valuations.
First Direct has variable loans up to 65% LTV and fee of £499 at 1.79% above Base for the term of the mortgage, and 75% LTV deals at Base +1.99% for the term.
Santander is offering Base+1.99% for the life-time of loans up to 60% LTV with no fees and the same rate on loans up to 75% LTV with fees of £495.
For TSB current account customers paying £1,000 or more into their account, there is a range of re-mortgage products for those with existing TSB mortgages and those moving their mortgage from another lender. The deals include free legal and valuation packages and are available on loans that start by 30 November 2014.
For borrowing up to 60% LTV, with a maximum loan of £1 million, rates start at 1.29% above Base, fixed for two years, rising to the bank's Homeowner Variable Rate, currently 3.99%, for remainder of the term. The product has a fee of £1,995, but £500 cashback is paid on completion. A similar deal with no product fee is currently 1.99% above Base for two years, again reverting to the bank's Homeowner Variable Rate. For borrowing up to 75% LTV, TSB will charge 1.69% above Base for two years or 2.99% above Base for loans up to 85%, both with a product fee of £995 and reverting to the bank's Homeowner Variable Rate, currently 3.99%.
For buy-to-let customers, specialist lender Paragon Mortgages is offering a range of lifetime tracker products from 4.50% at 65% LTV, 4.70% at 70% LTV and 4.95% at 75% LTV. All three products track the LIBOR rate, currently 0.6%, and charge a product fee of 1.50%.
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