Mortgage bulletin for week commencing Monday 7 October
As the market, and homebuyers, await news of the rates mortgage companies will be setting for their new Help to Buy mortgages, details of how to apply for them are becoming clearer. The scheme, which is available for three years, provides two ways in which house buyers can buy their new home. The mortgage guarantee that has now been introduced is available on new and second- hand properties up to £600,000 with a standard mortgage of up to 95% of the cost of the new home, or loan-to-value (LTV).
The other route for homebuyers is the equity loan, using a government loan of 20%, a 5% deposit and a traditional 75% LTV mortgage. This part of the scheme was launched on 1 April this year. Help to Buy agents have been appointed, and homebuyers wanting to apply for a Help to Buy mortgage must first approach the Help to Buy agent for the area in which they hope to live.
Banks and building societies that have already said that they will offer loans include the Royal Bank of Scotland, Lloyds Banking Group, NatWest and Halifax, though details of rates and deals are yet to be published.
Meanwhile, Coventry Building Society has launched a new range of mortgages for residential purchasers with two-year fixed-rates from 2.09%, available with a choice of fee structures and some with no early repayment charges (ERCs). Rates vary depending on the LTV, starting at 2.29% for purchases at 65% LTV, fixed until 31 December 2015. A £199 booking fee is payable and ERCs are payable if the mortgage is redeemed before the end of the fixed-rate period.
Also available until 31 December 2015, is Coventry's Base Tracker Mortgage, reduced to 1.79% from the current rate of 2.09% until 31 December 2015, based on 65% LTV, £199 booking fee and £800 arrangement fee with no ERCs.
Colin Franklin, sales and marketing director for the Society, says: "Our new range not only offers a choice of fixed or variable rates, including Base Rate Trackers, but borrowers have a choice of fee structures."
Tesco has refreshed its range of mortgages, with its new products offering highly competitive two- and three-year fixed-rate deals at 85% LTV with rates of 2.99% and 3.39% respectively, both with a £1,300 product fee. Tesco Bank's two-year tracker mortgages are available from 3.9% at 60% LTV to 4.2% at 85% LTV - each incur an £800 product fee.
David McCreadie, managing director for banking at Tesco Bank, says: "Today's rate changes illustrate our commitment to continually offer customers a strong choice of products from a highly competitive range. The new range includes some great products including a new Fixed Rate Saver for those customers looking for a good rate over the longer term and our most competitive 85% LTV mortgage yet."
A number of building societies are currently offering two-year fixed-rate mortgages for investors looking to buy-to-let. Skipton Building Society is offering two-year fixed buy-to-let mortgages at 3.88% at 75% LTV, rising to 5.69% for the remaining term, while the Nottingham Building Society has two-year fixed-rate deals at 75% LTV at 3.49% rising to 6.54% after the fixed-rate period. The Nottingham deal carries a £1,999 arrangement fee, and an ERC of six months' interest applies until 1 November 2015.
Clydesdale Bank is offering two-year fixed-rate buy-to-let mortgages from 4.29% at 70% LTV rising to 4.79% at 80% LTV. Both mortgages revert to the variable rate of 5.35% after the fixed period and have a £999 arrangement fee.
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