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Swaps remained virtually unchanged last week. There has been little rate activity in the past couple of weeks but there’s been a fair amount of innovation and also replication.

• One-year money is down 0.01% at 4.94%

• Two-year money is unchanged at 5.02%

• Three-year money is unchanged at 5.07%

• Five-year money is up 0.01% at 5.07%

Hero of the week is Platform for the changes it has made to its criteria. It has launched a 90% buy-to-let proposition for conforming and sub-prime mortgages. It has raised many of its income multiples and cut its self-employed minimum trading period for self-cert to three months.

Platform has also introduced five LTV bandings across its sub-prime range, which should allow lower LTV clients to get lower rates. Its 90% buy-to let proposition is dif- ferent from The Mortgage Works’ in that rather than charging a 1% fee as TMW does, Platform charges a higher rate for 90% while charging the same fee.

It has a three-year tracker at 90% at 5.55%, a lifetime tracker at 6%, a two-year rate fixed at 6.10%, a three-year fix at 6% and a five-year fix at 5.90%.

Villain of the week is Northern Rock for having a different interest-only calculation to other lenders. It is apparently called Enhanced Monthly Rest and the good news is that it means payments are lower than on a traditional interest-only loan. The bad news is that it is impossible to explain and unless the client is an actuary or a nuclear physicist, they stand little chance of understanding it.

Coventry has launched a pair of trackers which look great value as they have no early repayment charges. Both rates are for two years. One of these deals is 4.50% with a 350 arrangement fee and a 199 booking fee and the other is 4.75% with a 150 arrangement fee and a 199 booking fee.

Royal Bank of Scotland Intermediary Partners has increased its two-year fixed rates. I think it needed to slow down the number of applications to ensure its services standards remained intact. RBS and First Active two- year fixed rates have gone from 4.59% up to 4.85%. These rates come with 599 fees. A 4.95%deal with a 499 fee is also available.

After all the adverse comment about its exit fees, Alliance & Leicester has committed to setting exit fees at the start of mortgages, rather than changing them during the term of the loans. Northern Rock has already committed to this and I hope other lenders follow suit. In contract terms I could never understand how lenders were allowed to make such significant changes to exit fees during the term of a client’s mortgage.

The Derbyshire has increased the pay rates on its Swiss LIBOR trackers. Swiss LIBOR rate has increased by 0.25% up to 1.45%. The society has reduced the margin it charges over LIBOR so the rate increases are less than the LIBOR increase. The Derbyshire’s residential five- year tracker is now available at 4.29%, (2.84% over three-month LIBOR) and the society’s lowest buy-to-let five-year tracker is at 4.44% (2.99% over LIBOR).

I’m not sure if the new fees match the old ones which were 0.5% for residential and 1.25% for buy-to-let, or if the LTVs have changed.

Standard Life has made a number of changes to its buy-to-let criteria.

The maximum LTV has increased to 85%, the rental income is calculated at 120% and it will also consider earned income. The maximum loan at 85% LTV is 400,000 and the maximum loan at 75% LTV is 750,000. It offers a remortgage of up to 10 properties for total arrangement and booking fees of 999.

I forgot to mention last week that Mortgage Express’ new two-year discounted buy-to-let product at 4.79% has the interest calculation at the pay rate. This usually applies on rates of three years and over.

Jonathan Cornell is technical director at Hamptons Mortgages


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