Swaps surged last week. The shorter rates increased by almost the full 0.25% increase of the previous week\'s base rate. While I had been expecting them to increase slightly, I thought markets had already priced the increase into swaps, as a base rate increase had been expected. With the base rate at 4.50%, having swaps at 5% seemed to show that this was the case. One-year money is up 0.20% at 5.05%
Two-year money is up 0.19% at 5.27%
Three-year money is up 0.16% at 5.27%
Five-year money is up 0.13% at 5.22%
I don’t think swaps will fall for a while, even after the Bank of England’s suggestions that there could be more rises.
Mortgages PLC now has a comprehensive buy-to-let range for prime and sub-prime business. Its proposition includes 90% buy-to-let lending, 120% rental calculation of the pay rate and a let-to-buy product with no rental calculation at all.
If I had any clients who wanted buy-to-let mortgages where the rental was close to the amount needed, based on the calculation I would get these applications in quickly. With swap rates surging and SVR and tracker rates rising, some lenders have a window for applications based on previous rental calculations.
Mortgage Express announced that it will be reducing some of its discounted rates (relative to the base rate increase). The new rates will be launched this Thursday.
Northern Rock’s online proposition now supports buy-to-let mortgages, so submitting applications should be easier. It has also increased its fixed rate range. The 18-month fixed rate now starts at 4.79% up to 85% LTV. Its two-year flexible fixed rate up to 85% is now 4.99%, three-year flexible fixed up to 85% is now 5.29% and five, seven, 10 and 15-year flexible fixed rates up to 85% LTV are now 5.39%. The fee is 695.
Woolwich has just launched a 10-year fixed rate at 4.98% with a 595 fee. The launch email said it was market-leading and showed it was 0.01% better than its closest competitor with the fee a full 4 less. On a 200,000 mortgage this means a client will save 24 over 10 years, although, admittedly, the Woolwich rate does have a remortgage package. It has also launched a couple of buy-to-let products, including a two-year tracker at base plus 0.49% available up to 85% LTV with a 1.5% fee and a two-year fixed rate at 5.79% up to 65% LTV available only as remortgage package.
RBS Intermediary Partners has increased its One account flexible mortgage rates by 0.35% rather than by the 0.25% that the base rate went up by. The long-term rate is still quite low, but this is still unfair for borrowers on these rates.
I was interested to see the Lloyds TSB/Cheltenham & Gloucester advert in London’s Evening Standard for brokers to “help facilitate the more unusual mortgage requests – those which fall outside of the lending policies of Lloyds TSB specialist lender C&G”. I thought C&G could do anything within its lending policy.
Portman withdrew its two-year fixed rates last Wednesday. The two-year fixed with 999 fee has gone from 4.49% to 4.69%, the two-year fixed with 599 fee is now 4.89% and there is a two-year fixed at 4.99% with a 649 fee, free valuation and either free legals or a 250 cashback.
Skipton seemed to withdraw its fixed rates with little notice. An email came through at 4pm on Wednesday saying rates were being withdrawn that day. Fortunately, at the bottom of the email it gave a generous deadline of August 15.
The Mortgage Business withdrew a number of generic rates. Don’t you hate receiving emails which say: “The following generic products are being withdrawn: TFP133, TBE370, TBE406, TBE409, TBE456, TBE457, TBE512, TBE513, TBE514, TBE515, TBE516 and TBE517.”? Not broker-friendly is it? Please give us the pay rate, a description of the rate and the product code.
Jonathan Cornell is technical director at Hamptons Mortgages