Mortgage bulletin for week commencing Monday 30 June
New rules on lending are making it more difficult for some would-be home owners and those wanting to exchange their mortgage for a cheaper product. The Bank of England has indicated that it will cap borrowing for home purchases at 4.5 times income, and is expecting lender to apply stringent affordability criteria to their lending decisions.
However, some lenders are being accused of using these rules to stop homeowners switching their mortgage to reduce their repayments, effectively trapping them on the higher rate products. Financial watchdogs have been critical of this and will be looking at carefully at lenders, expecting them to act fairly in the interests of their existing customers.
Meanwhile, Skipton Building Society is reducing many of its mortgage rates, some by up to 0.4%, and introducing new two-, three- and five-year fixed-rate products at 60% loan-to-value (LTV) to create more choice for its customers. Kris Brewster, Skipton Building Society's Head of Products, says: "The wide range of products we now have on offer at very competitive rates means that Skipton is well-placed to help anyone in the residential housing market. We're continuing to lend strongly, in line with our commitment to doing everything to help borrowers, and the ongoing popularity of our products is a reflection of that."
Skipton's new offers include a a range of two- year fixed rate deals from 2.35% to 70% LTV with a £195 application fee and a £300 completion fee and 2.59% up to 60% LTV with no application or completion fee. For those with smaller deposits, the two-year fixed-rates are 2.55% to 75% LTV and 2.85% to 80% LTV, both with a £195 application fee and an £800 completion fee. Three- year residential fixed-rates include 2.65% to 60% LTV, 2.99% to 75% and 3.48% at 80% LTV, again all with an application fee of £195 and an £800 completion fee.
All of the above are available through the Society's Skipton Direct customer service centre, branches and all intermediaries for purchases and remortgages, and offer free standard legals and free valuations for remortgages.
Pick of the week of three-year deals this week is from the Post Office, which is offering a three-year fixed-rate for re-mortgage customers at 2.75% at up to 75% LTV with no arrangement fee, free standard valuation and free standard legal fees.
The Nationwide Building Society is offering re-mortgage customers a three-year fixed rate of 2.49% on loans up to 60% LTV with a booking fee of £99 and product fee of £900, or 2.79% with a reduced booking fee of £99. Both Nationwide deals also offer free valuation and either free legals or £250 cashback.
Tesco Bank has a three-year fixed rate of 2.39% on mortgages up to 70 LTV with a booking fee of £195 and product fee of £1,300. Re-mortgage customers get free standard legals and valuation.
Chelsea Building Society's three-year fixed rate on loans up to 65% LTV is currently 2.59%, with a product fee of £1,545, while those re-mortgage can get a rate of 2.64% from Yorkshire Building Society, fixed for three years on loans up to 65% LTV with a £130 processing fee and £845 product fee.
First Direct is offering 2.69% for its three-year fixed-rate deal with an administration fee of £500, while its fee-free alternative is currently 3.09%.
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