Mortgage bulletin for week commencing Monday 14 October

Posted 14 October 2013

The average price of a house in the UK rose by £1,127 last month according to LSL Property Services plc, owners of Your Move. This pushed the annual rise to 12%, increasing the value of the average home in the 12 months to September by £8,525. Against this background, more details are emerging from lenders on their Help to Buy mortgages. The government-backed scheme, launched last week, allows buyers to get a mortgage with only 5% deposit.

Royal Bank of Scotland and NatWest are offering two- and five-year fixed-rate deals for homebuyers with a 5% to 10% deposit at rates of 4.99% and 5.49% respectively. Both offers fall to 4% variable after the fixed-rate term, and there are no product fees. Halifax and Bank of Scotland are offering two-year fixed-rate Help to Buy mortgages, again with a 5% to 10% deposit, at 5.19% with a fee of £995 and 5.59% with no product fee.

Outside of Help to Buy, there are a number of 90% and 95% loan-to-value (LTV) offers with Hanley Economic Building Society offering a five-year fixed-rate mortgage for 5.69% at 95% LTV with a £100 arrangement fee.

For those with a 10% deposit, 90% LTV mortgages will cost 3.99% from Skipton Building Society, fixed for two years with no arrangement fee and £160 cash back, while Skipton's five-year fixed-rate mortgages are available at 4.68% at 90% LTV, with £190 application fee and £800 completion fee. Both are available for purchases and remortgages and offer free standard valuation and legal fees for remortgages. First Direct is offering a variable rate of 4.19% for 90% LTV with no arrangement fee and 3.99% with a £999 arrangement fee.

Clydesdale and Yorkshire Banks have launched new three-year fixed-rate First Time Buyer mortgages for those with smaller deposits. The rate for first-time buyers with a 5% deposit has been cut from 5.49% to 4.99% with no arrangement fee, free valuation and £250 cashback. Their new 90% LTV First Time Buyers Mortgage has being introduced, priced at 3.99%. Early repayment charges (ERC) apply to both offers.

NatWest Intermediary Solutions has reduced selected rates in its intermediary core range for first-time buyer, fixed-rate, tracker and buy-to-let deals from 60% to 90% LTV. It has also launched a new five-year fixed-rate deal at 3.19%, 70% LTV, with a £995 product fee. Core Range reductions include a 0.64% drop in the rate of its two-year fixed-rate 85% LTV with no product fee to 3.75% and a 0.24% reduction in its three-year fixed-rate 85% LTV mortgages to 3.75% with a £995 product fee and 4.35% with no product fee. The five-year fixed-rate 85% LTV drops 0.30% to 4.39% with a £995 product fee and 4.59% with no product fee, and there has been a 0.31% cut in its two-year base rate tracker 70% LTV to 3.39% with no product fee.

NatWest has also reduced some buy-to-let deals, with its two-year fixed-rate at 60% LTV falling from 3.39% to 2.99% with a £1,495 product fee or 3.59% with no fee. First- time buyers can benefit from the company's two-year fixed-rate deals, cut to 3.19% at 80% LTV and 3.55% at 85% LTV. First-time buyer five-year fixed-rates are also cut to 3.79% at 80% and 4.39% at 85% LTV. These first-time buyer deals are free from product fees.

Head of sales Mark Bullard says: "These changes provide better value to brokers' residential clients across nearly every LTV banding. We are also bolstering our buy- to-let proposition by sharpening some of the rates and removing those deals that have a £495 product fee so that intermediaries have a choice of lower rate/product fee or higher rate/no product fee deals to offer their clients."

Finally, good news for Dunfermline Building Society customers who will see their monthly mortgage payments reduced. Dunfermline is bringing its standard variable rate (SVR) down from 5.19% to 3.99% to align it with Nationwide's SVR. Tracie Pearce, head of mortgages at Nationwide, says: "Dunfermline's customers will benefit from a lower mortgage rate. This will make a big difference to customers who will see a significant drop in their monthly mortgage payment."

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