Mortgage bulletin for week commencing Monday 5 May

Posted 6 May 2014

House prices are seeing double-digit percentage rises in some areas of the country which means first-time buyers may have to find a larger deposit for their first home. Mortgage lenders are providing a range of incentives to attract new customers including free valuations, free legal pack and low fees.

Specialist lender Kensington has removed the £195 administration fee from all current products and now offers free valuation on all new mortgages, with additional free legals on remortgages up to £500,000. There is also a range of incentives available across its Buy to Let mortgage range. Kensington offers intermediaries a range of specialist mortgages for customers who might fail an automated application system, including the self-employed, contractors, bonus earners and applicants who have failed a credit score as well as experienced and first time buy-to-let landlords.

Alex Hammond, head of marketing communications at Kensington, says: "As we move into a traditionally busy period for the mortgage market, Kensington is signalling its intent to deliver better value to mortgage intermediaries and their clients with specialist circumstances."

Meanwhile, Coventry Building Society has launched new low rates on a number of residential and buy-to-let mortgage products on Friday 2 May. With rates starting from 1.89% and a selection of fee structures and LTVs, new range highlights include a 3.09% two-year fixed-rated on loans up to 85% loan-to-value (LTV), with a £199 booking fee, £800 arrangement fee and early repayment charges (ERCs) payable during the fixed-rate period. A five-year fixed rate is available at 3.14% at 65% LTV, again with a £199 booking fee, £800 arrangement fee and ERCs payable during the fixed-rate period.

Members looking for their first home purchase can benefit from £500 of IKEA vouchers with the five-year fixed-rate deal at 4.69% for loans up to 90% LTV, with £199 booking fee, no arrangement fee, and with ERCs payable for five years. The Coventry's buy-to-let customers are being offered a five-year fixed-rate mortgage at 4.79% on loans up to 75% LTV with a £250 booking fee and £999 arrangement fee.

Some of the best remortgage variable-rate deals on the market, variable for the term of the mortgage and with no ECRs, include a 2.25% Flexx for Term rate with The Coventry on loans up to 65% LTV, 2.69% up to 75% LTV and 3.34% up to 85% LTV. All three products offer a free basic valuation and have fees of £999. Santander is offering remortgage customers a rate of 2.49% up to 60% LTV with no booking fee or up to 75% LTV at the same rate with a booking fee of £495. These deals are available on loans up to £1m. On loans up to £2.5m, the rate rises to 2.59% with a booking fee of £1,995.

A number of variable mortgages offer a discounted rate for the first two years. On loans up to 60% LTV, NatWest is charging Bank of England base rate (BBR)+1.35% for two years with a product fee of £995 or BBR+1.99% with no product fee. For loans up to 70% LTV, the rate rises to BBR+1.45% for two years with a product fee of £995, or BBR+2.09% with no product fee. All products revert to the current NatWest variable rate of 4% (BBR+3.5%) after the discounted term.

Nationwide is offering free standard legal and valuation fees for re-mortgagers. A two-year discount rate tracker mortgage of BBR+1.44, rising to the Nationwide's standard variable rate, currently 3.99% thereafter is available on loans up to 60% LTV, with fees of £999, or BBR+1.84% with fees of £99. Two-year discounted tracker loans up to 75% LTV are currently offered at BBR+2.04% with fees of £999 or BBR+2.44% and fees of £99.

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