Mortgage bulletin for week commencing Monday 30 September

Posted 29 September 2013

The Council of Mortgage Lenders (CML) has welcomed confirmation by the Treasury that there will be a regular review of the Help to Buy mortgage guarantee scheme each September by the Financial Policy Committee.

Amid fears that the scheme could result in a hike in house prices, the CML says that the review, led by the Bank of England, will help lenders and borrowers alike. CML director general Paul Smee says: "Lenders need a predictable operating environment to participate effectively in the Help to Buy scheme. We now have an indication of how and when the Bank of England will determine whether the scheme needs to change during its three-year proposed lifespan, and this annual review will be a key deciding factor in that. We hope that there will also soon be clarity on issues such as the government's exit strategy at the end of the scheme."

Meanwhile, Nationwide Building Society is accepting mortgage applications from borrowers looking to take advantage of the Scottish Government's own Help to Buy scheme. From this week (Monday September 30), equity loans will be available to all homebuyers in Scotland purchasing a new-build property who meet the Help to Buy (Scotland) scheme criteria, including first-time buyers and home movers, purchasing their only property in Scotland up to a maximum value of £400,000.

Nationwide is reducing its rates for new and existing borrowers across its fixed and tracker mortgage range, cutting them by up to 0.15%. The new two-year fixed rate is 1.94% up to 60% loan-to-value (LTV )and 1.99% up to 70% LTV. For existing Nationwide mortgage customers those rates fall to 1.84% and 1.89% respectively. The new three-year fixed rate is 2.29% up to 70% LTV or 2.19% for existing Nationwide mortgage customers. All offers have a £900 product fee, reduced to £400 for first-time buyers, while remortgage borrowers receive a free standard valuation and the choice of either free standard legal fees or £250 cashback. A non-refundable booking fee of £99 is payable on reservation on all deals.

Nationwide has also reduced all 80% LTV mortgage rates by up to 0.3% and all 75% LTV mortgage rates by up to 0.15%. All two-year and three-year fixed-rate 85% LTV and 90% LTV products have been reduced by 0.05%.

Accord Buy to Let has announced three new fixed-rate mortgages for buy-to-let investors, offering zero completion fees, £500 cashback, and £195 product fee. Available from Monday 30 September at a maximum of 75% LTV, rates start at 3.79% for a two-year fixed term, 4.09% for three-year term and 4.69% on the five-year deal.

Virgin Money has also launched a new range of buy-to-let mortgage products. Available through registered mortgage intermediaries, Virgin Money Stores and over the telephone, it offers rates for new mortgages starting from 3.38% for a two-year fixed-rate product with a £1,995 fee. Following the fixed or tracker period, all mortgages from the new buy-to-let product range will revert to the Virgin Money Buy-To-Let variable rate, currently set at 4.99%.

The company has also announced reductions on a number of its residential mortgages. Two-year fixed rates have fallen by up to 0.2% with 90% LTV now available at 4.55%, 85% LTV at 3.29% and 80% LTV at 2.68%. A £995 product fee applies.

Virgin's Fee Saver Option two-year fixed rates have also been reduced to 2.34% up to 60% LTV, 2.44% up to 70% LTV and 2.74% up to 75% LTV, while two-year tracker products with a £995 product fee are available up to 70% LTV at 2.14%, up to 75% LTV at 2.24% and up to 80% LTV at 2.68%. A five-year fixed-rate mortgage up to 70% LTV is now available at 3.05% with £995 product fee, or 3.39% with no product fee.

Santander has built on its ‘Freedom' proposition by making its entire range of standard residential tracker mortgages free of Early Repayment Charge (ERC), on loans up to 90% LTV, available to homebuyers and remortgagers. All new ERC-free ‘Freedom' mortgages include the ability to overpay on all mortgages and 1% cash back on Santander UK mortgage payments up to £1,000 per month when paid by direct debit from a Santander 1|2|3 Current Account, and include a two-year tracker with a rate of 2.19% and £495 booking fee, or 2.49% with no booking fee, available up to 60% LTV.

The rate for loans up to 70% LTV is 2.29% with a £495 fee, while those borrowing up to 80% LTV will pay 3.29% with £495 fee. Rates are 3.69% and £495 fee or 3.99% and no fee for loans up to 85% LTV, and 4.49% with a £495 fee up to 90% LTV.

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